Professional Documents
Culture Documents
*#*.&:/&/
SS3\Q»c
BY
ALSO, AS AN
APPENDIX,
AN EXCHANGE CALCULUS, FIVE PAPEES, AND A MEMORANDUM ON
MONEY, WITH VALUABLE AND ORIGINAL TABLES,
LONDON: \
x
http://www.archive.org/details/coinofrealmwhatiOOsharuoft
EXTRACTS OF LETTERS RECEIVED BY
MR. NORMAN, IN COMMENDATION OF
MISS SHARLAND'S AND HIS WORK.
"I am very much obliged to you for the printed matter you
kindly sent me, i.e., ' Single Grain System.' I have taken notice
of them with great interest."
"I am sure every one who has read Miss Sharland's papers
must have been very greatly pleased and owes his best thanks to
her for the admirable exposition of your system."
'* Miss Sharland's chapters on " Money " are most instructive
and most ingenious. They cannot fail, I am sure, to make boys
and girls not only take an interest in but to make a hobby of
the subject."
COIN OF THE EEALM: WHAT IS IT?
''
—
TO
MRS. FAWOETT.
.
PREFACE.
" John's face turned very red, for he was a clever boy, and
my last remark wounded his pride greatly. But he was a
thoroughly good fellow, and the next minute he looked into my
face with a roguish smile.
Miss Sweet is " Ah, Miss Sweet," said he, " you are at your old tricks again,
asked to /know! That's always your way of going on when you want
define money.
to tell me something jolly and interesting. Come let's hear !
what you've got to tell about money, now that I've had my
say."
,
WHAT IS IT r 9
"It would take a longer time to tell than I can stand here
talking, John," I answered j " but if you will drink tea with me
next Saturday evening, we will sit over the fire afterwards, and
have a talk about the history of money. If you find that you
would like to hear more about it, why, you must come to tea
about money. Many a cosy tea and chat did we two have J^^T
together that winter, until John knew as much about the subject tiona.
Chapter I.
upon to spend your money always in the best ana wisest way
i i i
;
" There are only two kinds of gold coins used in England
now," said John " the sovereign, or pound, which is worth
;
say. But what more can you tell me about money 1 "
" What more 1 " repeated John. " What more do you want ?
There's nothing more to tell."
" Nothing more to tell, John ? " cried I, turning up my eyes,
and throwing up my hands. "I am afraid you must be very
!
ignorant to say so
" John's face turned very red, for he was a clever boy, and
my last remark wounded his pride greatly. But he was a
thoroughly good fellow, and the next minute he looked into my
face with a roguish smile.
Miss Sweet is " Ah, Miss Sweet," said he, " you are at your old tricks again,
asked to /know! That's always your way of going on when you want
define money.
to tell me something jolly and interesting. Come let's hear !
what you've got to tell about money, now that I've had my
say."
WHAT IS IT P 9
'
' It would take a longer time
than I can stand here
to tell
talking, John," I answered you will drink tea with me
; " but if
next Saturday evening, we will sit over the fire afterwards, and
have a talk about the history of money. If you find that you
would like to hear more about it, why, you must come to tea
again, that's all."
So that was how young John Smith came to know so much This leads to
a series ot
about money. Many a cosy tea and chat did we two have conversa-
together that winter, until John knew as much about the subject tions.
Chapter I.
upon to spend your money always in the best and wisest way ;
with rue many hundreds of years, and try to imagine how our
forefathers lived before money had been invented. How do
you suppose men managed to buy and sell in those days, when
they had no money to part with, and their neighbours also had
none to offer them ? They used to exchange things that they did
not want, for things that they did want. Suppose a man had a
flock of sheep, but no corn, he would give a sheep, or part of one,
for so many measures of corn. This way of exchanging goods
was called barter or truck (from the French, troc), and I suspect
that men tried to overreach their neighbours, even in those
early times, by asking them to accept worthless things in return
for valuable ones, because the word truck is now a common
expression of contempt in Devonshire : "I don't want any of
your truck /" a Devonshire man will say if he is offered any-
thing that he considers rubbishy.
The difficulty But the worst of this sort of trading was the difficulty of
of establish-
ing a fair establishing a proper ratio of exchange — that is, to determine
system of what number of articles of one description should be considered
exchange.
equivalent to a certain number of articles of another description.
Suppose, for instance, that your mother wanted 2 lbs. of
nothing to offer for these things but a pair of new boots don't :
now when cattle are driven through the streets of a town to and
from the market place but then, as soon as market is over^
;
. — —
;
* Classical writings lead one to suspect that the earliest currency used
at Rome, Lacedaemon, and Carthage was formed of leather. Leather money
is also said to have heen circulated in Russia as late as the reign of Peter
the Great, whilst English tradesmen's token-money was prohably made of
stamped leather at one period. [Since writing these chapters, I have received
the following interesting account of a modern leather medal from a young
co-operator, in his description of how the Queen's Jubilee was kept at
Barnsley, in Yorkshire :
—
" The cordwainers exhibited a novelty often heard
of hut seldom seen —
a leather medal. I had the pleasure of seeing one of
them the day before they were worn. On one side were these words :
1
Barnsley Cordwainers' Society, established 1747. In commemoration of
Her Majesty's Jubilee, June 21st, 1887.' The medal was ciroular, the words
being stamped round a gilded crown."
The following newspaper cutting has also been contributed by another
young co-operator :
Cuhious Money. —
The battle of Poictiers took place on the 19th of
September, 1356, in which King John of Prance was made prisoner, and
many of the French nobility li st their lives. The c iptive monarch, though
respectfully treated, was brought to England to grace the triumph of the
conqueror. The peace, in 1360, put an end to his captivity, but to obtain
his liberty he made over many of the most valuable provinces of his king-
dom to the King of England, and agreed to pay a ransom of three millions
of gold crowns, which reduced him to the necessity of paying for the
necessaries of his household in leather money, in the middle of which there
was a little nail of silver.
!
WHAT is it: 13
stamped with
in authority, and it is thought that some ruler of the land made
seals.
the impression of his seal upon each coin to certify that it was
of true weight.
Different
kinds of
—
All these metals gold, silver, copper, tin, lead, and iron,
were used as money in every age of which we have any historical
metal used
account but they were not manufactured into coins and stamped
;
Primitive from the very first, though the art of hammering metals into
forms of
metal various shapes was early invented.
money. Most of the metals were first circulated in rough lumps,
Rough lumps whilst the primitive form of gold money seems to have been gold
dust. All of them were bought and sold by weight against other
Gold dust. commodities ; so many grains of gold dust, for instance, for a
skin, a cow, or ameasure of corn.
Bars or As soon as metals began to be moulded, iron, copper, and
spikes. The
brass appear to have been made into bars or spikes. size
WHAT 18 IT 'i 15
melting their gold- dust or silver ore, and working it into thick
wire this they twisted into spiral rings, and probably wore
;
until they were obliged to exchange them away for other things.
You see, different nations adopted different fashions even in
those early ages : in some countries it was the fashion to wear
shell-money, in others silver coins, and we have certain proof
that gold and silver ring-money was worn in many countries of
For my part, I should
the world at different periods of history.
not like to wear rings one day, and to have to part with them
the next, and I do not suppose that you would approve of this
plan of buying food and clothing, either.
I have already told you that iron bars were circulated as Iron,
How odd you would think it, if, when you laid down a penny
and asked for a halfpenny worth of sweets, a couple of bullets
were handed back to you for your change Or, worse again, !
break.
Picture the following scene Tom Channing has had a
:
been bent and unbent a good many times, so Tom then proceeds
to straighten it out before going off to spend it. Snap goes the
tin shilling in two Poor Tom need not trouble himself as to
!
Copper Copper takes a good impression, and keeps its colour well
but it has one great drawback, namely, its excessive cheapness.
for coinage by the Romans and pewter has often been coined. p
;
ewter
pieces
r accepted
r for the value of silver ones. I am afraid he must P .
crown -pieces.
have had a bad conscience as far as his money matters were
concerned, and he was not the only sovereign who has played
tricks with the coinage of his kingdom when hard driven
for cash.
18 COIN OF THE REALM:
Chapter II.
Metals in use I have told you all that is necessary for you to know at
now. present concerning the metals which have been found unsuit-
able for coinage for the future, therefore, I shall direct your
;
some food. A =£5 note will hardly do, because of your railway
ticket to begin with. Suppose you carry three sovereigns,
two half-sovereigns, and ten shillings' worth of silver in your
purse, hidden away in the depths of the inner breast-pocket of
your Sunday coat the other ten shillings, in the form of small
;
silver and a few coppers, being stowed away in vest and trousers
Portability. pockets, where you can easily get at them. One necessary
point, then, is that money should be portal e ; that a few coins
should represent a sufficiently large sum of money, and that
these few coins should be neither too large nor too heavy.
Divisibility. You get to the station by driving six miles in a spring-cart,
and at once go to take your ticket, asking for a " Second-class
WHAT TS IT? 19
return." " Twelve and fourpence," says the man at the hole,
and you hand him a sovereign from your purse. How awkward
it would be for you if the ticket issuer were unable to give you
change But no such fear you get your change clapped down
!
;
true, are near of a size, the shilling being rather the larger of
the two ; but only just feel the difference in weight between
them ! The sovereign is so much the heavier of the two coins
that you could tell which was which in the dark, and the same
proportional difference in weight exists between a half sovereign
and a sixpenny bit. Even our little silver threepenny bit has
now no rival, though a few years ago, when fourpenny pieces
(called groats) were still issued, it was necessary to look closely
at the smallest silver coins in one's purse.
I hope I have succeeded in proving three points in favour
20 COIN OF THE REALM
thirdly, that all the coins now in circulation can be easily and
immediately recognised by old or young, rich or poor.
Indestructi- Another point to be considered in the choice of a material
bility.
for money is, that it should be indestructible.
Furs not in- No doubt the North American Indians still carry on a brisk
destructible.
trade with furs, exchanging them for other things which they
require. But if a fire should ever break out in one of their
villages and burn up their stock of skins, the loss would be as
disastrous for them as the breaking of a bank would be for
more civilised folk. Besides this possible misfortune, there is the
certainty that in the course of time furs will wear out no one ;
would care to accept a fur which had worn into bald patches in
exchange for anything new.
Nor cattle. Then, again, as to cattle. In the days when they were used
for exchange purposes, the time must have frequently arrived
when a man had to kill and eat his money rather than run the
risk of its dying of old age.
Our coins, however, are much more indestructible than furs
or cattle they wear out very slowly, and if the stamps imprinted
;
was actually the method which some savage people adopted for
supplying their larders with prime beef. But those who were
hardly cold-blooded enough to practise such live butchery could
not be always slaying their beasts whenever they wanted a
pennyworth of milk, or a half-quartern loaf; nor would their
neighbours be in constant need of beef, mutton or pork.
The metals used for coinage get over this difficulty nicely for jyr
eta i eas ,i v
us ; they are so equal in quality and weight that a large lump of divided and
gold or silver can be easily sub-divided into many smaller lumps su m e "
of equal weight and size, so that each coin will contain as nearly
as possible the same number of grains of gold or silver, and will
possess the same value. This is another very desirable quality „ , , ,
in the material used for money; indeed, the only unsatisfactory that the value
point to be mentioned with regard to our present system of ° f metal is
coinage is, that gold and silver vary much in their value from
time to time, and whenever a change takes place in the value of
either metal, somebody has to suffer for it.
Hitherto I have avoided as much as possible using words Explanation
which you would not easily understand, but the time has arrived of technical
when I must explain to you the meanings of several terms which
are used in reference to money only.
The word currency is applied to all kinds of money which may c urrency
be freely circulated. You have heard or read of the current of a
river or stream : the word current means flowing onward.
If you take a shilling out of your pocket, and buy something
22 COIN OF THE REALM :
Standard (2) Token money. The first is called " unlimited legal tender,"
money.
because it may be coined by permission of the state in unlimited
quantities, and freely circulated through the kingdom. A gold
sovereign is our British standard coin our English government
;
WHAT IS IT ? 23
Suppose, however, that your father offered to pay your master Token
monev
the ten pounds in silver. Ah ! that would be quite another -
matter ; our silver coins are only token money, not standard
money, and they are legal tender only up to a certain amount.
Forty shillings is the largest sum in silver that a person is
strictly bound by law to accept, and twelve pence only in
coppers (as we still call our bronze coins) are legal tender. Of
course people often oblige each other by accepting more than forty
shillings' worth of silver, or a shilling's worth of coppers ; but
it is unusual to carry about large amounts of silver or copper
indeed, it would be uselessly loading one's purse or pocket to do
so when there is so much representative money in circulation. I
have just made use of another term which requires explanation Kepresenta- — i
necessary that you should trouble your heads about it until you
! ; ;
you take the trouble to work out the sum for yourself, that the
intrinsic or real value of a sovereign is worth as nearly as
possible what it represents, viz., 20 ahillings, or 240 pence
whilst the intrinsic value of a bank-note, no matter how large
the sum may be which it represents, is about one-eighth of a
penny
Intrinsic If you were
go into a silversmith's shop, and ask to look
to
value of
paper at some watches and if, when you had chosen the one you
;
money. liked best, you were to offer the shopman the first bite out of a
beef patty you had just bought, he would either be very much
insulted by your behaviour and show fight, or else he would
take you for an escaped lunatic And yet a bite out of a !
answers for it) that its gold or silver standard coins contain a
certain proportion of fine gold or silver, therefore the actual
amount of metal which each coin contains fixes its value ; for,
as I have already told you, gold and silver lose very little in
weight or quantity by being melted down. Our British gold
standard sovereign is accepted in every country possessing a
money currency, in exchange for national coin of almost equal
value, because it is a well-known fact that each sovereign which
has not had very much wear, contains its 113 grains of fine
gold.
And now we come to the finding of the precious metals.
I am sure you will all feel a much greater interest in metal On the edu-
cation of a
coins, and value them more highly, when you know more of miner.
their history. You must not imagine that every man who can
well handle a pick or shovel is fit to become a miner. I suspect
that many a man has gone to the gold diggings with this mis-
taken idea, and has been much disappointed at not making his
fortune in a very short time. A
good miner requires to be
highly educated in manyTo begin with, he should Geology.
sciences.
know something of geology, that is, the science which teaches
the nature of the various substances of which the earth is com-
posed. A geologist understands in what description of ground
miners may dig with a reasonable chance of finding minerals,
for without this knowledge men might spend all their work-a-
day lives in looking for that which they might never find.*
Mineralogy and chemistry are also very necessary sciences ;
Mineralogy
and
the first teaches men the nature and value of the different
chemistry.
mineral substances found underground, and by a knowledge of
chemistry they learn how to separate one metal from another
but those are not the men to rise — they will never become
agents of any branch of the work, these being only chosen from
amongst the miners who have shown a knowledge of mining,
cau do the required work themselves, and are fit to direct
others.
Mr. Bullion In the next chapter you must imagine yourself to be John
and John
Smith, aged 16, and that your iriend Mr. Bullion has invited
Smith take a
balloon trip. you to take a voyage through the air with him in his balloon,
to visitone or two of the chief mining districts in the world
where the jrecious metals (as gold and silver are usually
called) are brought to light and prepared for use. This is by
far the most convenient, form of travelling. Mr. Bullion under-
stands the management of his balloon so well that you and he
will avoid all the dangers and fatigues of travelling by sea or
land; and, besides that, will see by the aid of the telescope
which is fixed in the balloon a great deal of what is going on
below without being obliged to alight Very often you will
pass over vast tracts of country, and see all you wish to see
unobserved even by the busy people below you.
!
WHAT IS IT ? 27
Chapter III.
what we are going to see. Tell me first whether you can re-
member what our course has been so far.
John Smith : I think I can do that off pat, for there has not Route from
been time to forget it yet. We started from the Land's End,
^p^nama^
Cornwall, in a southerly direction, and came down at Brest
Harbour, on the north-west coast of France. The next day we
still travelled southward, keeping the western coast line of France
well in sight. We passed the north-west oorner of Spain, and,
bearing down the western side of Portugal as far as Lisbon,
took another rest there. Up we went again the following
morning, and skimmed along over the Azores, the Canary and
Madeira Islands, until we reached the Cape de Verde group,
when you let us down into St. Jago and now we are scudding
;
along over the Atlantic due west, have crossed the line, and are
nearing the Isthmus of Panama. Why, it's the best geography
lesson I have ever had in my life, and one that I am not likely
to forget in a hurry, either
Mr. Bullion: You have certainly learnt your lesson well.
Perhaps you are as good at geology as you are at geography,
and can tell me in what kind of soil gold is found in California ?
28 COIN OF THE REALM:
John Smith's John Smith : I know nothing about such things, Mr. Bullion,
ideas of but I have always supposed that men dug deep down into the
earth, and then burrowed about like rabbits until they found
some big nuggets of gold, and that the bigger the nugget was,
the greater the luck of the man who discovered it.
away with that idea. You, my dear young fellow, woidd expect
ifyou joined a mining expedition, to work with your mates until
you hit upon a nugget of several pounds weight at least, when
you would decamp with your treasure, carry it home to old
England, and make your fortune by disposing of it at the
Mint.
John Smith : That is exactly what I should do, sir, you may
depend !
the owner of that land, and obtain from him permission to look
for gold. I should next try to form a mining company amongst
my trusty friends, choosing only men who were as ready to risk
their capital in the enterprise as myself ; having done which, we
should make our terms with the landowner. Probably he would Rent of
round
mark out the extent of ground within which he would allow us g
-
secondly, taking the metal out of the ground and preparing it for
use. The first kind of work Cornishmen call tut work or dead Tut work.
work it necessitates an immense amount of manual labour,
;
are for verymuch more money than the piece of work is worth.
Generally one man is chosen to be spokesman by the mates with
whom he is accustomed to work ; the contract is made with him,
and he and his gang carry it out together. There are certain
rules laid down also, a copy of which every miner has to sign ; if
this were not done, some of the men might throw up their work
before a contract was fulfilled, or whenever they were finding less
metal than they hoped or expected to find.
work, the accounts and financial matters, and, lastly, the general
control. For each of these departments there is a superintendent
or agent, and, over them all, a general manager, who reports
progress to the committee of the mining company from time to
time, and gives them his advice. This general manager, as you
may well behove, requires a good head-piece (as Devonshire folk
say), and the agents also are generally chosen from the most
intelligent of the miners ; so you see it is a great advantage to a
labouring miner to gain as much knowledge as he can about all
the different branches of mining operations, in order that he may
fit himself for one or other of these responsible posts. But it is
high time to think about dinner, so let us leave our mining for
some cooking operations now.
(Mr. Bullion and John Smith had an excellent dinner : Dinner in the
the former minced some tinned meat, and made and fried a good Dalloon -
turned out a very respectable cheese omelet for the second course.
Then followed coffee, and Mr. Bullion's pipe.)
John Smith : Please, sir, are you ready for a talk ? I wouldn't
ask you until I saw that you had finished your pipe, but I am
longing to hear some more about mines.
Mr. Bullion (smiling) You have been very forbearing, John,
:
such things.
Mr. Bullion ; I am so glad you have reminded me of it, for
I want to talk to you about those very things before we arrive at
the gold mines. I am not going to teach you geology, young
man ! no, nor mineralogy either ; but only so much of these
sciences as may help you to understand where certain metals
are to be found, and in what form.
John Smith : Those are just the very things I am most anxious
to understand, so I shall listen to you with all my might.
Mr. Bullion: Very well, then. Geologists tell us on good Formation of
authority that the earth must once have be^n a molten mass — roc •
and stratified were not formed in beds or layers, they are called unstratified
ocks.
WHAT IS IT ? 33
which forced their way through the different strata at such times
combined with newly-created substances, caused all sorts of
3
34 COIN OF THE EEALM
variations in the natures and textures of these stratified
rocks.
Systems John Smith : Surely it must be very difficult to distinguish
sometimes
one class of rock from another ?
missing.
Mr. Bullion : It requires careful study, certainly, especially
as in many districts some of the systems will be found missing.
John Smith : How can that be if they were formed one after
the other in proper order 1
Mr. Bullion : For the simple reason that the various volcanic
disturbances which were constantly taking place, combined with
the action of floods and storms, altered the surface of the earth
continually. What was dry land during one period might be
covered with water during the next. Dry land, you know,
would have no sediment deposited on it that only took place —
under water therefore dry land might miss over a system, and
;
change and some geologists call them gneiss and mica schist
;
rocks. The next system deposited was less crystallised and more
stratified.
Veins and throughout the whole of the fissure. These fissures are called
odes. veins,and veins that contain metal are styled lodes, to distin-
guish them from those fissures or veins which are filled with
non-metallic minerals.
John Smith: How jolly it must be to come upon a bunch of
gold!
Mr. Bullion (laughing) : Very jolly indeed when you do; but
unfortunately gold is more frequently found in small crystals or
WHAT IS IT ? 37
meant.
Mr. Bullion : I can soon explain it to you. But you must
allow me a few minutes' grace, for I really think I have earned
another pipe, don't you ?
John Smith (laughing) I should rather think you had, sir ;
:
so I'll fill your pipe for you, and light it, too !
!
Chapter IV.
you know. Now comes the weighing process. First weigh the
cube very exactly, and make a note of its weight. Then im-
merse the wire-work scale, gold cube and all, in the distilled
water; balance the gold very carefully under water, and you
will find it will weigh a good deal less than it did out of the
water. Subtract the lighter weight from the heavier one, and
divide the first or heavier weight by the difference the result :
Mr. Bullion : Very well, then, the weight lost by the immer-
sion in water of your gold cube is the weight of a quantity of
water equal in bulk to the solid cube which has taken its place.
Therefore you can compare the weight of your cube of gold
with that of an equal volume of water and when you read ;
that the specific gravity of gold is 19, and of silver 10£, you
know that gold is 19 times and silver 10| times as heavy as
water.
John Smith ; Thank you, sir I see it much better now.;
But what is the use of finding out the specific gravity of metals
when they are bought and sold according to their real weight ?
Mr. Bullion : You must know as well as I do that there are
tricks in every trade ; it is highly desirable to be able to dis-
tinguish easily between a precious stone, or a metal, of great
value,and those cheap imitations of them with which persons
have so often been taken in. By knowing the specific gravity
of these substances a jeweller would most likely be able to
detect at once the difference between a precious stone and a
piece of well-cut coloured glass, for instance or between fine ;
to what you are saying will make the time pass quickly.
Mr. Bullion : First, I must explain to you that metals are
taken from the earth in two different conditions ; they are found
Gold the only either in a native, that is, metallic state, or else so blended with
you beat the eggs, together with some milk and warmed butter.
Before your mixture had been added to mine, the dry ingredients
—
were just themselves the flour was still flour the sugar, sugar
;
;
WHAT IS IT ? 41
sulphur nor any other mineral substance deprives it of its water or air.
metallic nature, as they do other metals. Then, again, most of
the metals gradually decompose, or become eaten away with
rust if exposed to air or moisture but it is not so with gold or
;
and silver are tell me in what countries gold, silver, copper, and tin are
found -
found?
John Smith : Gold and silver are found in North and South
America. Gold is also found in Australia but I am not so sure
;
about silver.
say that gold is found in our own United Kingdom now, sir?
Mr. Bullion : It is, indeed but not in sufficient quantities to
;
WHAT IS IT ? 43
now there are some rich gold mines known to exist in Wales,
but the gold they contain occurs in the shape of nuggets, and
the miners so easily make away with these, that the landowners
cannot afford to work the mines in consequence, and they are
closed.
John Smith : What a pity that this cannot be prevented
I'd have them all searched before they left work, wouldn't you,
sir?
Mr. Bullion : It seems odd that the difficulty cannot be over- |£i ner3
'
caught at last.
uncomfortable they must have been, and hot too, with that coat
of dust about them whilst they were working.
Mr. Bullion : I do not suppose they disliked it as much as
you and I should. But their trick was at length discovered,
and they were all obliged afterwards to strip before leaving
work.
44 COIN OF THE REALM
Copper mines. Mr. Bullion : There are plenty of copper mines in England,
and a good deal of copper is also obtained from other European
countries, as well as from Asia, Africa, Australia, and the two
Americas. Now and then, copper is found native, and in very
WHAT IS IT? 45
Chapter V.
Several days have elapsed since the last recorded conversation Route from
took place between Mr. Bullion and John Smith. After spend- California.
ing a night at Panama they ascended from the western side of
the isthmus ; and as soon as the balloon had risen sufficiently
high, steered out over the Pacific Ocean. Their route lay in a
north-westerly direction, past the western coasts of Costa Pica,
Nicaragua, Salvador, Guatemala, Mexico, and the lower part of
California, until at length they came in sight of the big city of
San Francisco, with its beautiful bay, and its grand background
of hill country. Mr. Bullion had decided that they should pass
a couple of nights here, in order that they might devote one
whole day to sight-seeing ; so they steered inland, and, having
been observed by some of the inhabitants a short while before,
descended into the midst of a considerable crowd just in front
of the arched entrance of the Palace Hotel. This hotel is said Palace Hotel,
to be the largest in the world,and certainly John was very much ^ an .
that our two travellers saw during their visit to Mr. Verdigris
—
Description John Smith : Let me see first comes digging down into the
:
of gold and
silver mining ground and sinking the shafts. My word what hard work it !
in quartz is, breaking up that rocky ground. The men need to be paid
rocks.
well for it, I am sure !
bouring valley, and tunnel into the side of the hill till they
meet the hole of the shaft, and there they cut through the mineral
Adit level. vein as low down as possible. This tunnel is called an adit
level it serves two purposes, viz.
; —
(1) for the drainage off of a
good deal of water, and (2) for the removal of the ore.
Mr. Bullion : I think you told me that even in the adit level
the pumps are obliged to be kept at work ?
John Smith : Yes, the steam pumps are constantly at it,
because the shafts are in some places sunk ever so much below
the level of the adit but there, you see, it saves a great deal of
;
But I am very glad you went down ; it must have given you a
better idea of it than all the telling could have done.
John Smith: It was great fun. You know, besides the
proper adit level, there are short galleries leading from the big
shaft into the hill at all sorts of different levels. These passages
cut across the mineral lode, and by their means the lode can be
worked ever so much more quickly than if only one set of men
dug down to it from above. I went into several of the galleries,
and found men hard at work in each of them all that they dig ;
*™i n
-
1
r
smaller pieces than they can be knocked into by hand. These mills,
told me that the pestles which were doing the stamping weigh
between three and four hundred pounds each. Those we saw
were made of iron, but sometimes wooden pestles with iron
heads are used. They are set in motion either by steam or water
power I suppose by whichever of the two can be most easily
;
ones, though very big lumps have been found from time to time.
To separate the gold particles from the earthy matter, a machine Cradle
rockln S-
called a cradle is used. To rock the cradle is a more serious
undertaking where gold is concerned than if a baby were in it,
for it takes four men to manage each cradle properly ; all the
same, I'd rather rock gold than babies !
John Smith : Don't you believe that, sir ! but, at all events,
the contents of a Californian cradle would suit me better than
the domestic article. The gold washer's cradle is a great wooden
trough, six or seven feet long, with two rockers underneath it,
end of the cradle, a third does the rocking, and a fourth keeps
up the supply of water and attends to the proper washing of the
sand.
Mr. Bullion : I have seen pictures of cradles, and they all had
bars at the bottom. I suppose they are put there for some
purpose ?
hold the plank in an inclined position, and pour water over it.
The gold, being heavy, collects with a little sand towards the
bottom groove it is then placed in a fiat bowl, and when stirred
;
stow away the gold dust which it contains in leather bags, which
they wear fastened in front of them. I believe the cradles are
mostly used in Australia and California.
Sulphurets. Mr. Bullion : Then there are some ores called sulphurets,
because they contain a good deal of sulphur. The sulphurets of
silver, arsenic, and iron, although often very poor in metal, may
yet contain a small proportion of gold which, with careful treat-
ment, can be extracted with profit. Sometimes the gold is
separated from them in this manner : The ores are first roasted,
to free them from the sulphur, ; then they are melted into what
are called mattes, which are again roasted, and next fused (or
melted) with lead. By this plan an auriferous lead is obtained,
which can be refined by a process called cupellation. When ores
are very rich in gold they are melted directly with the lead,
without being roasted.
John Smith : I know nothing about cupellation.
Mr. Bullion : I will give you a full description of it in its
proper place. But there is another and better method of
Amalgama- separating gold from its ores, called amalgamation, which is
tion.
practised wherever quicksilver is obtainable. I suppose you did
not see anything of it yesterday ?
John Smith : "When the mill has been working for several
hours, all the quicksilver is collected and put into a narrow linen
bag, and the uncombined mercury is squeezed out of the bag,
leaving the amalgam of gold behind.
Mr. Bullion: You have quite turned the tables upon me
John, by becoming my instructor. I never before heard of the
process which you have just described so well.
John Smith : The clerk says it is only one of many ways of
separating gold from other ores, and that various kinds of
apparatus are employed for this purpose. He told me that in
1853, when there was such a rush Mr.
for the gold-diggings, a
Burdon of New
York, invented a very clever machine, now well Burdon'sgold
ore pulverizer
known as " Bur don's gold
° ore pulverizer
r and amalgamator."
& and amalga-
.
But, would jou like me to finish my story by telling you how mator.
the gold is got out of the amalgam, sir 1
Mr, Bullion : Tray do ; I shall like to hear that.
John Smith : The combined gold and quicksilver, commonly Separating
known as the " amalgam," is placed upon a piece of iron strongly ! g<j7
heated and resting on a brick which is standing in water. The amalgam,
whole is covered with a cup, called a " cupola," which forms a
water joint at its bottom edge and keeps out the air, whilst the
neck of the cupola dips into a vessel of water. The heat of the
iron plate drives the mercury out, and it becomes condensed in
the water, leaving a spongy mass of gold upon the iron plate.
Mr. Bullion: I quite understand. And the condensed
mercury need not be wasted, for it can be collected for further
use.
John Smith : Yes ; so the clerk said. I wanted very much
to know how the gold is made up ready for use after being
separated from the amalgam, but unfortunately he could not tell
me that.
Mr. Bullion : Well, I am glad to say I can give you that Gold made
information. A crucible —that is, a pot made of plumbago FJ
'
"? °
travels again.
John Smith : Just tell me before I go, please, sir, what we
are to see next. I shall not sleep a wink if you don't tell me
that
Mr. Bullion (laughing) I will answer for your not lying
:
awake when once you lay your head upon your pillow but I ;
Proposed trip wjH satisfy your curiosity. "We shall start to-morrow morning
to New York.
on a balloon trip to New York, accompanied by Mr. Verdigris,
who intends to visit with us the Assay Office, and get leave
for us to be let into all the mysteries of parting and refining gold
and silver bullion.
John Smith : How delightful ! But I do not yet know any-
thing about the separation of silver from its various ores.
Mr, Mr. Verdigris thought of that; but he says he
Bullion :
Chapter VI.
WHAT IS IT ? 53
lie was quite ready to have a chat with John Smith about the
treatment of silver ores.
Mr. Verdigris : What do you know about silver ores, John ?
Just give me an idea, that I may know where to begin.
John Smith : Only this that silver is rarely discovered in a
:
and horn
vitreous silver or silver glance, black silver, red silver,
silver. Besides these, there are sulphides of lead and copper,
from which small proportions of silver are obtained, and the two
ways in which silver is extracted from its various ores are ( 1 —
smelting, and (2) amalgamation.
John Smith : I am never sure that I understand what is
meant by smelting, although I know the process has something
to do with furnaces.
Mr. Verdigris : To smelt ores is to extract the metal from Smelting,
them by means of heat. Smelting is called the dry method,
whilst amalgamation is known as the wet method of treating
ores. The former is practised chiefly on the argentiferous (or
silvery) sulphides of lead ; the ore is first roasted and reduced
to powder which it is ready
so as to expel the sulphur, after
for refiningand cupellation.
John Smith : Gold is treated very much like that some-
times but I have yet to learn the meaning of cupellation.
;
Mr. Verdigris : You shall see the process with your own eyes Amalgama-
when we get to New York. Amalgamation is a very compli- tl0n '
particulars.
(Accordingly John did his best to repeat what had just
been related to him, and with very little prompting from Mr.
Verdigris, succeeded most satisfactorily.)
Mr. Verdigris (turning to Mr. Bullion) John knows more :
Pattinson'a Mr. Verdigris : Did you ever hear of the Pattinson process
process of
extracting of extracting silver from lead ?
silver from John Smith : No, I do not think I ever heard of it, though
lead.
I have often been told that a good deal of silver is generally
found in the lead ore.
Mr. Verdigris : Then I will giveyou a description of the
process, so called because it was invented and patented by the
late Mr. Pattinson, of Newcastle-on-Tyne. It is one of the
simplest and best plans that has ever been discovered. Imagine
nine cast-iron pots, each pot being about 6 ft. in diameter, and
having a fire underneath it. In the middle, or fifth pot, is
placed a quantity of lead containining about 10 ozs. of silver to
the ton, and called " original lead." Pure lead becomes solid
at a higher temperature than lead with silver in it ; therefore,
the lead and silver, when quite melted, are allowed to cool
slowly the fluid metal is kept stirred, and as small portions of
;
WHAT IS IT? Ot
WHAT IS IT? 59
Mr. Verdigris : In America, the greater part of the gold Gold bullion,
produced is brought straight to the government mints to be
refined, for the government do not charge any more for refining
base bullion, and parting gold and silver, than the private
refiners do, and most of the gold producers prefer dealing with
the institutions belonging to the governmental mint service, for
the sake of having their fine gold stamped with the official
stamp. This stamp, you see, is a guarantee that every gold
purchaser would accept for the fineness of the gold he is about
to buy.
John Smith : Suppose a gold producer does not want to have
back his gold when it has been refined, but would rather have
California to never have been such a duffer at geography if I had been allowed
New York.
to learn it by making balloon trips with you. I will give you
our route at once, in a very few words Salt Lake City (of :
not many islands in Lake Superior, and they are all near the
shores, so that there is a vast space of open water, and, being
fresh, the seas that arisj there are tremendous. There is, of
course, no tide, but in summer time the water falls a good
deal, rising again in the autumn and spring. One of the small
islands in this lake was a bright, silvery-looking rock whose
reef could be traced, shining through the clear water, to the
mainland. I do not know when its silvery appearance first
! ;
WHAT IS IT? 61
Chapter VII.
Mr. Tizzy's Mr. Verdigris : We must find our way to the Assay Office
invitation.
this morning, John, before we go anywhere else, for I have had
a very kind note from Mr. Tizzy, the superintendent of the Assay
Office, invitingyou to spend the morning with him, and to lunch
with him, after seeing all that is to be seen.
John Smith : How very kind of him ; but are not you and
Mr. Bullion coming too, sir ?
Mr. Verdigris : I have other business which must be attended
to ; so, as Mr. Bullion has already been let into the secrets of
the assaying process, he proposes accompanying me to another
part of the city as soon as I have introdiiced you to my friend,
Mr. Tizzy.
)
I have desired John to pump you quite dry before he allows you
to leave the office to-day. This young friend of Mr. Bullion's has
come all the way from England in a balloon for the sole purpose
of studying mines and precious metals.
Mr. Tizzy : Dear me, you don't say so Then you must be!
you looking on, who wants to know all about it, will make our
morning's work more interesting than usual.
John Smith : That is a very kind way of putting it, sir. I am
glad you do not mind answering questions, for I shall be sure
to think of lots that I want to ask.
The duties of Mr. Tizzy : Fire away, then I only hope you will not
!
an assayer.
manage to ask me anything I cannot answer. But first tell me,
do you fully understand the duties of an assayer 1
John Smith : I believe you have to test the ores, and I sup-
pose that is done just as a chemist analyses anything.
Mr. Tizzy : Not so. In a chemical analysis it is the business
of a chemist to find out every separate ingredient contained in a
compound mixture, and the relative proportions of each. But
an assayer need not do that ; his business is merely to find out
how much precious metal the sample of bullion brought to him
contains.
John Smith : I see. And is all the gold and silver you receive
here made into money ?
Various uses Mr. Tizzy : Oh, dear, no ! "We accommodate everybody who
of gold
silver.
and
has anything to do with the precious metals —miners, bankers,
jewellers, and all sorts. Anyone who brings us bullion —that is,
—
unmelted gold or silver to the value of 100 dollars or more,
can leave it with us and receive payment for it. For gold we
give either gold coin or fine bars ; for silver we do not give coin,
but fine or standard silver bars. These gold and silver bars have
their weight and fineness stamped on them, and the gold bars
have also their value stamped upon them.
John Smith : I should have thought that people would always
rather have had money for their bullion than bars.
Mr. Tizzy : That depends on what they are going to use the
metal for. Now that jewellers and gold and silver workers can
get bars of the precious metals, a vast number of standard coins
are saved from destruction every year and this is a very good
;
Light coins. thing, for you must remember the newest and best coins had to
be selected for melting down, whilst the worn coins remained in
circulation until some unfortunate persons were told that their
money was of light weight and could not be accepted.
John Smith : What did they do, poor things, when they could
not pass their coins ?
Mr. Tizzy : The only thing they could do was to take them
—
WHAT IS IT ? 65
Mr. Bullion : Well, John, and what sort of a day did you
"
have yesterday 1 Did it come up to your expectations ?
John Smith : I never had such an out-and-out delightful
day before. Mr. Tizzy was as jolly as could be, and I saw
everything.
Mr. Bullion : That is right, then. Mr. Verdigris is obliged
to leave us to our own devices this morning ; so suppose you
begin at the very beginning, and tell me all that you saw and
heard described yesterday.
John Smith : That is what I have been wanting to do
just
before I forget any of though I do not think there is much
it,
melt. But the granulations taken from the stirred fluid are
very fair samples of the rest of the contents of the crucible, Mr.
Tizzy said.
Mr. Bullion : So I should imagine.
Gold samples John Smith : After I had seen the gold bullion melted and
tested. cast into bars, small samples were cut from these bars — little
and refining.
Mr. Bullion : Did you see the fine gold produced from those
little metal buttons ?
—
annealed that is, made red-hot and cooled, which softened it,
for the hammering makes the metal too hard. When cold, it
was coiled up and called a " cornet." This cornet was boiled
two or three times in sulphuric acid, the acid being poured off
after each boiling, and replaced with a fresh lot this is done to ;
rid the gold of the silver it contains, for silver dissolves in the
acid, and gold does The cornet was next washed twice in
not.
from the acid, after which it was once
distilled water, to free it
more made red-hot, then cooled and very carefully weighed, to
determine the fineness of the gold. Having weighed the assay
sample at the beginning, you see, they were able to find out
how much of that sample was alloy.
Mr. Bullion : You certainly saw a very great deal in a
wonderfully short space of time.
John Smith : And all the times between, whilst we were
waiting for the metals to melt or Mr. Tizzy was talking
cool,
^ 1 * 01 discover -
'
'
With the aid of this instrument, and by making very careful ing the speci-
calculations, they can determine as nearly as possible the pro- gravity °*
, .
Amount of so combined that the gold granulatious shall have over two parts
alloy
allowed. of silver and copper to one of gold, taking care that there shall
be not more than 8 per cent, of copper in the mixture whilst ;
the silver granulations are all right if there is not more than
1 4 per cent, of copper alloy in them.
Mr. Bullion : Did you see it all done ?
John Smith : No, there would not have been time to see
everything. We went straight to the separating room, and
there Mr. Tizzy told me how the gold and silver granulations
had been prepared. In this room there are four huge cast-iron
kettles set in two furnaces, each kettle being made to hold 168
gallons. Two of them are generally kept for gold, and two for
silver granulations, and the sulphuric acid is added to the granula-
tions from time to time from a reservoir on the floor above, into
which it has been forced by air pressure from a receiving
Treatment cylinder into the basement. I will tell you what happens to the
of gold
granulations.
gold granulations first.
went down Broadway to the end of all things, and when there
!
WHAT IS IT? 69
we visited the emigrants' landing station, and the park and visit to the
put up and get their emigrants'
rotunda where tne emigrants are able to
money changed on their way through New York. station.
Mr. Bullion : And did you get back in good time ? for it is
998 1 per mil fine. A coating of bone ash on the surface of the per mil fin ^
melted metal was used to absorb the base metal oxides and the
flux.
reducing vats.
Mr. Bullion : It seems to me that the silver-reducing vats
are made to hold a ha'porth of all sorts !
the contents of the vats are hoiled for four or five hours by
means of steam. The silver gradually gets deposited on the
copper plates placed at the hottom and on the sides of the vats,
part of the copper having gradually replaced the silver in the
solution. The next morning this copper solution is siphoned
into two large concentrating tanks, which stand on platforms
.
WHAT IS IT? 71
melted, fluxed, and cast into bars, this silver is found to be from Silver bars
999 to 999£
999 to 999^ per mil fine ; even finer than the gold, you see !
great kindness but, please, come and see me when you visit
;
England, and you will find a warm welcome ready for you at my
father's house.
Mr. Verdigris : Thank you, John ; I shall probably take you
at your word, for it is quite my present intention to go over to
Europe next year, if all be well.
Mr. Bullion : Then be sure to let us know when you are
coming, for I shall invite you, and John also, to accompany
me in my balloon on a visit to some of our tin and copper
mines.
Mr. Verdigris : I shall be delighted to do so, for I have had
no experience of either tin or copper mining, and I do not con-
sider my education complete as far as coinage is concerned until
I have done so.
John Smith : I can understand your wanting to know all Tin used in
Mr. Verdigris : Then again both the gold and silver of Gold for
:
which our coins are made are alloyed with copper. The gold coinage.
employed in the manufacture of sovereigns and half-sovereigns
contains eleven-twelfths of gold to one-twelfth of copper ; whilst
silver money contains silver and copper, mixed in the propor- Silver for
tions of 925 parts of silver to 75 parts of copper. Coins made coinage.
is, therefore, that not only is the gold not captured, hut mercury-
is lost or carried away in the refuse or tailings. With some Loss <>f gold
'
quickness ' of the mercury, no matter how deleterious the of the
always quick, and greedily attacks and absorbs the gold into
itself.
" So far the ingenious but simple method of maintaining jj ow t bring
the mercury in a quick condition. We now have to describe the the powdered
equally ingenious and simple means whereby the pulverised gold con tinual
ore is brought into absolute and maintained contact with the contact with
the outward channel between the edge of the disc and that of
the pan. Here, freed from the pressure of the disc, the
pulverised ore floats up and over the edge of
the pan, and
passes away, leaving behind mercury every atom of
it in the
gold it previously contained. This perfect extraction is due to
the rolling action, which separates each particle of the ore and
rolls it for some ten seconds in the bright, quick mercury,
which wrests every atom of gold from it. The whole machine
weighs only about 5 cwt., and its working capacity is 10 tons
per day. It will be seen that the conditions which here obtain
are the most perfect for the purpose of amalgamation. Owing
to the perfection of contact no floating gold can escape, and in
the presence of hydrogen no sickening of the mercury can take
place. Hence, every particle of the gold is secured, unless
mechanically encased in an atom of ore. The process has long
since passed the experimental stage, but the Hydrogen-Amalgam
Company, who are working the patents, were careful not to
publish any particulars of the invention until it had assumed
Machines at a practical form, and could be deemed a commercial as well as
work in
a scientific success. Machines are at work in the United States
different
countries. of America (where they have been tested and favourably
reported on by Professor P. de Pierre Ricketts), the Transvaal,
[creased and Mexico, while some are now on their way to India,
quantity of
gold Australia, and New Zealand. It is stated that the increased
extracted.
quantity of gold extracted by this process has never been less
than 10 per cent., and that in most cases a much larger per-
centage is reached. In short, this method of applying
electricity, with the intervention of a porous wall or cell, has
overcome all the difficulties previously encountered, while the
WHAT IS IT? r:>
whole cost of treatment by this process is said to amount to only Small cost of
rea n
about threepence per ton for both electrical and mechanical b t
J^
force, and for labour." From the Times, September 9th, 1887. process.
Chapter VIII.
Mb. Bullion and John Smith have just returned to England. A visit to the
They are pm^suing their way steadily through certain streeta Mint.
in the great city of London, on foot, and with a decided air of
business.
Mr, Bullion : Well, John, your education is nearly complete
so far as the history of metal money is concerned. At this
moment we are on our way to the place where I propose that
you shall take some finishing lessons.
John Smith : Which means that we are going to pay a visit
to the Mint, does it not, sir ? The Tower of London is close
at hand, and I know that the Royal Mint is not far from it.
Mr. Bullion : You have made a good guess. Mr. Consol Mr. Consol
time. So this is the young man who wants to be let into all
our secrets, is it? Well, sir (giving him his hand), you
shall see all that is to be seen, only you must not try to
pocket any of our money Come this way. (He led them
!
into the reception room, where they entered their names in the
visitors' book.)
Mr. Consol : We are going to take things in their right order, The melting
so our first visit will be to the melting department. These department.
blocks looking like bricks are called ingots. Just take this one
into your hand. hand involuntarily dropped with the
(John's
weight of the ingot.) Ah I thought you would be taken
!
worth £800. Every ingot has to be tested by the assayer, gold ingots.
and according to his report the melter adds either gold or
alloy to bring the metal to its standard fineness, — twenty -two
76 COIN OF THE REALM:
parts of fine gold to two parts of alloy. In this crucible the
Gold bars. metal is melted, and then cast into bars like these you see,
about 10 lbs. each in weight, and measuring twenty-one inches
long, one and a half inches broad, and three-eighths of an inch
thick.
Silver bars. John Smith ; And is this what our silver coins are made of ?
(pointing to some rather dull-looking bars of metal.)
Mr. Consol : Yes ; they do not look a very promising colour
yet, do they ? that dulness is the result of oxidation, or the
coating of the alloy with oxide ; but it is easily removed with
acid, as you will see by-and-bye. The processes of manufacturing
gold, silver, and bronze coins are so nearly the same, that if we
follow up the history of these gold bars, you will know quite
enough about coining.
John Smith : Is it quite certain that those bars have the
right quantity of fine gold in them ?
Mr. Consol: The assay er has to test every set of bars before
they are allowed to be sent on to the coining department. But
come with me and see what becomes of our gold bars.
They followed Mr. Consol into another large room.
Gold bars Mr. Consol : These pairs of rolls are worked by steam. Just
rolled and
notice what an uncomfortable squeeze they can give Each !
annealed.
bar undergoes six or more pinches, which reduce it in thickness
whilst its breadth is increased. After the pinches, the bars
are enclosed in copper tubes, and put into the annealing
furnace, where they are subjected heat for to a dull red
twenty minutes.
Mr. Bullion ; John looks as if he wanted to ask a question.
John Smith : I know that to anneal metal is to soften it by
making it red-hot but I should like to know why that is done
;
Fillets Mr. Consol : Those pinches between the heavy rolls make
brought to the bars too hard to receive a good impression from the dies
right thick-
ness and with which the coins are stamped ; so the metal is annealed in
weighed. the manner I have just described. Here are some bars that
have come from the annealing furnace, and must now go
through the pinching process again until they are reduced to
a thickness corresponding to that of the coins to be made. When
the fillets (as these strips of metal are called) have been rolled
and gauged until thought to be the right thickness, they are
WHAT IS IT ? 77
the weights Mr. Consol gives me, so that I may not forget them
by-and-bye.
Mr. Consol : Here we come to another stage in the pro- Making
blan s'
ceedings. The fillets of metal are passed under these machines,
and the blanks which are to become coins are punched out
of them.
John Smith : What a lot of scraps of metal are left ! I
suppose they are not wasted ?
Press room. Mr. Consol : This room which, we have now entered is the
press-room. In the lower part of the presses are dies, with mov-
able steel collars surrounding them. Each blank drops into
Stamping the one °f tne round the inside of which the milling
stee ^ coll ars >
coins. ( s cut, and this is transferred to the edge of the coin at the
same time that the two impressions are stamped upon its back
and face from the two dies.
WHAT IS IT P 79
our currant coin. These little weighing machines were invented ^chim^
by a Mr. Cotton, formerly a director of the Bank of England,
and are most wonderfully and perfectly constructed. You see,
we have no less than 30 of them standing upon the tables in this
room. The pieces of money are fed into a hopper at the top of
each machine, a quantity at a time, so that one man can attend
to several machines at once. The machinery pushes out the
pieces,one at a time, from the bottom of the heap in the hopper
they rest for a moment on one pan of a pair of scales, and then
fall over.
which drop to the right are over weight, whilst those to the left
are under weight, and must all go back to the melting room.
John Smith : It is one of the most splendid machines I ever
saw But what a lot of weighing and fuss each coin goes
!
through.
Mr. Consol : Even now these coins of true weight are not Imperfections
pic
quite safe from the melting room. Come and take a look at
another kind of machine. Several coins at a time are being
shown off upon a cloth belt — first one side of them, and then the
other. If any imperfection is detected upon either face of a coin,
it is picked out, and back it goes to be melted down with the
other rejected coins.
John Smith : It is lucky that so many of the coins come out
all right, otherwise a lot of time and trouble would be wasted
every day. But what becomes of the coins which are all right ?
Mr. Consol : They are tied up in bags containing so many Terfect coins.
pounds' weight each. Then some of the contents of each bag
are taken out, just as they come, and weighed and tested by
certain officers of the Mint and finally one piece of money from
;
each bag is sealed up in a packet and put away in the Pyx p ri f ^ of the
chest, there to remain until the next " trial of the Pyx " comes
on. Do you know anything about this " trial of the Pyx "?
80 COIN OF THE REALM :
WHAT IS IT ? 81
SECOND SEELES.
Chapter I.
Yott must now imagine that three months have elapsed since John Smith's
the last chapter of the first series was written. Duiing that Yisit to
.
John Smith : Yes ; and besides that I know how the metals
are taken out of the earth and converted into money.
Mr. Bullion : Then comes the question, What use can you —
make of this knowledge ?
John Smith : And that's what I cannot answer, for I do not
yet know what is to come of all your teaching.
6
:
Proposed Mr. Bullion : To-morrow, then, you shall begin a new and
practical
which I think you will enjoy sharing
practical course of study,
value and use with Alice and Will, who are just now much interested in the
of money. same subject. I shall send you young people to do all our
shopping for us, and you will have to give me an account of
what you have spent each time by the help of the new system
I amgoing to teach you.
John Smith : It sounds as if this new study was going to be
a jolly one but I have always been told that money was a very
;
WHAT IS IT ? 83
*******
shilling is now
time, the English
Alice into Manchester, where they were to put up the pony and
carriage for some hours, make various purchases, and lunch
together at a coffee house. Mr. Bullion invited the young people
to come to him in his study at eleven o'clock, so that he might
give them their first lesson in " Norman's Single Grain System " Norman's
before they started on their shopping expedition. As soon, then, sy^tem^*""
as they were seated at his study table, with paper and pen before
each of them, Mr. Bullion began, as follows :
rather, bronze, coins are only tokens ; their value does not
depend on the quantity of silver or copper they contain, but on
their being legal tender for some fractional part of our standard
coin, the gold sovereign. A shilling, for instance, represents
— :
WHAT IS IT ? 85
Mr. Bullion : I think you must give both the price in money
of each article, and also the number of grains of gold it is worth.
Each of you shall have some commissions to do ; your mother
will provide you with your list of errands, Alice, whilst I make
out a couple of papers for John and Will.
Before starting for their drive, the three young people made
the following calculations, and entered them in their respective
pocket-books :
Standards.
±1 contai] as 113-uuib, or about J LI3 grai us. Denomina-
10s 56-5008, 56£ tional
>) )> „
expressions
\>KENS. of all the
5s. 0d. is worth 28J h
British coins
with their
2s. 6d. >>
14-1252, 5> real and
2s. Od. j> 11-30016, 3 J ll^r „ representa-
K13 tive weights
Is. Od. >} 5-65008, )} °27 » in fine gold.
6d. j> 2-82504, )> n «
3d. >>
1-41252, )> H 9
„
2d. >> •94168, or nearly TO" »
Id. •4708,
'j >> £ ii
H >5
•2354, >» k »
Id. >) '1177, or rather more than ^ of a grain.
standard
is to become the monetary standard of a country, it must be
metal money.
received in unlimited quantities at the mint (or institution which
answers to it), fitted for currency, and appointed unlimited legal
tender.
John Smith : But I thought that was always the case ?
Mr. Bullion : In some countries, both gold and silver are
appointed unlimited legal tender, but they are not now both
received in unlimited quantities at any mint. Those countries
cannot properly be said to possess a dual standard or bi-metallic
currency, for their international trade (that is, their trade with
foreign countries) is conducted on the dearer metal only, there-
fore the dearer metal is their standard metal.
John Smith : I long for to-morrow, that we may begin our
shopping
Mr. Bullion : I told you that all your calculations will have
to be made by means of a new system, but I must also tell you
that this system is not my own.
inwards and upwards, meet at a point 486 feet above the base
Professor
of the pyramid. Several years ago, Professor Piazzi Smyth (the
Piazzi Smyth Astronomer Royal for Scotland ) Major Tracey, R.A., and other
t
and Major
learned men found out some very interesting facts connected
Tracey, R.A.
with this wonderful building and the plan of its erection. One
of their discoveries was as follows Inside the pyramid, there
:
Queen's
the one named the " Queen's Chamber " are the key to the —
Chamber standard of measure, according to which every part of the
standard of pyramid was planned and built. Many of these discovered
measure.
measurements are found to agree with scientific facts which were
WHAT IS IT? 81
wandering so far from our subject but now I will tell you in
;
Chapter II.
by) j but you needn't come with me, for I daresay I shall be
some time choosing all the things.
Will : We wouldn't miss seeing you do it on any account,
Allie?
Alice (trying in vain not to smile) .- Hush, Will ! (and she
turned her back upon him). I will take these three saucepans,
and I want a steamer that will fit the largest of them.
John Smith (in a low voice) : That biggest saucepan is worth
about 9 1 grains.
This time Alice could not help laughing, but she resolutely
turned a deaf ear upon the two boys, and went steadily through
her list of wants, interrupted first on one side of her and then
" Then I go on to the grocer's," said Alice, " and get The
shall Grocer,
over a little of my shopping in peace." When the boys rejoined
Alice, they were laughing at some fresh joke. " I asked Mr.
Hodder how many grains of gold my new coat and waistcoat
were worth," said Will, " and he evidently thought I had taken
leave of my senses."
" You will really get us into trouble if you go on like this,"
remonstrated Alice " do promise not to humbug in the shops,
;
The boys behaved tolerably well over their luncheon, for Coffee-house
unc eon
John, being the visitor, was too polite to carry on a joke when
'
" Only Allie turned prudish, and wanted to spoil our sport,"
WiU added.
" Oh, no John exclaimed
! Will," whilst Alice retorted ;
" That was carrying your fun too far, my boy," Mr. Bullion
said " you never know when to stop.
; I only hope you were
not rude to anyone ? "
" Oh, no, father," Alice rejoined, quickly ;
" Will soon shut
up. We have had a delightful day, and after tea we are going
to sit in the schoolroom and write our papers for you." So
saying, she ran into the house.
The next morning Mr. Bullion was duly informed that he
would find three papers waiting for him in the study, and he
promised to look them through, and be ready to talk them over
.. : —
;
wonder I got that right, though, for the boys were bothering
me every minute in that shop.
Will : I am sure we helped you ever so much. You would
probably never have found out the value of your water-can, or
your biggest saucepan either, if we hadn't reckoned it for you
on the spot.
Mr. Bullion (rapping the table) Now, then, to business. :
Come, Alice !
List of iron- Alice (reading her paper) This is what I bought at Tapps
:
:
Total... 19 10 JJ
1120593
WHAT IS IT? 91
Price. Grains of
.£ s. d. Fine Gold.
6lbs. coffee, at Is. 8d. per lb. 10 or 56-5008
3lbs. tea, at 2s. 6d. per lb. .., 7 6 „ 42-3756
6lbs. lump sugar, at 3|d. per lb. ... 1 9 9-8876
6lbs. Demerara sugar, at 2|d. per lb. 1 3 7-0626
Total ;i 6 „ 115-8266
Mr. Bullion : You have worked out your accounts very well
indeed, Alice,and I have only one improvement to suggest. In
stating the price of each separate article, in grains of fine gold,
you are quite right to give the number of grains and fractions
of grains in decimals to four or five places ; but, after you have
added the items together, you will be more correct if you give
the total result in decimals of two or three places only. By-and-
bye you by dividing 238 pence (the
can prove this for yourself
number of pence your ironmonger's bill comes to) by 2-123863
—
pence that is, the denominational expression of one grain you ;
will then discover that the fourth decimal figure should be nine
instead of three. John already realises this, I see ; for his totals
are given in decimals to three places only. Now, John, let us hear
what you have made of your day's shopping.
John Smith : I first went to Robinson's, to pay for your new Barometer,
hall barometer, sir. That came to <£3, or 339004 grains of fine
gold. Then followed our lunch at the coffee-house. We had as
much beef from a hot joint as we wanted, with potatoes and Bill at
coffee-house,
bread, for sixpence each. Miss Bullion's glass of milk came to
twopence whilst Will and I each polished off a couple of bottles
;
Mr. Bullion : Lucky for you to-day that you didn't I should
say Let us hear the items, and the total amount of your lunch
!
bill, John.
John Smith (reading from his paper) :
Price. Grains of
s. d. Fine Gold.
Three of beef, &c, at 6d ... 1 6 or 8-4751
One cheese-cake ... ... 2 j>
•9416
Three ditto ... 6 )>
2-8250
Four ditto ... ... 8 » 3-7667
One glass of milk... ... 2 >5
•9416
Four bottles of ginger-beer, at 2d
2d. 8 }1
3-7667
Total 3 8 „ 20-716
Pony's feed, I also paid one shilling for the pony's feed of corn— that was
&c -
5-650 grains of fine gold and the ostler's tip came to sixpence,
;
fewer decimal fractions you employ the more correct you will
be, unless you choose to add greatly to your labour by workiug
out the denominational expression of one grain of gold to at
least nine or ten places in decimals; 2123863d. you must
remember, is only an approximate value of one grain of gold.
WHAT IS IT ?
V°
Total £9 4 „ 1039-615
Mr. Bullion : Yes your bill came to a good deal altogether. Hat and
;
Will : —
Then there was my new bowler tbat was 6s. 6d., or coal bills -
36*725 grains and Mr, Clarke's coal bill came to two guineas,
;
or 237-303 grains. But father, I don't yet see the good of our
reckoning in grains of gold, like this.
Mr. Bullion: I will try to make that clear to you, Will. Use of single
Were I sure you would never be called upon to handle or think £' ram system.
about any metal money except that which is circulated in Great
Britain, I should still wish you to master this " Single grain
system," because by it you will acquire a knowledge of the true
value of every coin of the realm. I have already told you that
the value of our silver and bronze token coins is much less than
it passes for, and depends entirely on the number of grains of
standard metal they represent ; but there are very few people
who recognise this important fact. I trust that from henceforth
you three young people will never lose sight of this truth namely, —
that silver and bronze coins are only tokens of gold in this land.
I want you also, from this day forth, to think of price as a
definite weight of fine metal, that metal which is the standard
in the country where the price is quoted. You cannot get the
article priced unless you can command this metal, or one of
its tokens which has equivalent value with the metal. There
is another great reason, however, for my wishing you to get
into the habit of thinking that every coin you handle contains
! : .
that your definition of " value " is much better than Will's, my
dear. Now then, John, let us hear what you have to say
about it>
WHAT IS IT ? 95
Chapter III.
—
John Smith's lot. In some countries India, for silver silver Denomina- —
is the standard metal, not gold. How would you find out the tional expres- sionofagrain
„ . « ., t
denominational expression of a gram of fine silver in India, f silver
in a rupee on its issue from the mint. Come, Alice and "Will,
set your brains to work John is on the right track.
;
grain of John has been studying the money question for some time now,
gold Standard an(* ex P ec ^ y° u ^U nn(l that he knows a good many things
•"
country. that you don't. The next problem, however, I think will stump
even our young friend. How can you find out the gold price
of one grain of fine silver in a country like England, where gold
is the standard metal ?
Divide the 44d. by 444, and that will give you -099099 pence,
which is the gold price of one grain of fine silver in England
just now.
John Smith (after making a rapid calculation in his note
book): 165 grains multiplied by -099099 make 16-3513 pence,
so that was the price of an Indian rupee in England yesterday,
about 16^.
Mr. Bullion : you have a capital head for making
Just so ;
WHAT IS IT ? 99
Alice : Let me guess what comes next, father. Isn't it, how Price of a
Mr. Bullion : Yes, to be sure. Who will have done that first,
Alice, or Will ? (To Will's great delight, he finished his sum
before his sister).
Will (reading out his figures with a loud voice) : A British
sovereign is worth 14 rupees, 5 annas, 11 pies to-day in India.
!
Proportion
Mr. Bullion: Have a little more patience, Will, and I
established think you will find out that this is a useful thing to know. Let
between gold
and silver
—
us first take How to find out the proportion between gold and
in a gold silver in our own country. Divide the gold price of silver by
Standard do you
the denominational expression of one grain of fine gold ;
country.
follow me ?
John Smith (jotting down some figures rapidly) Yes, sir. :
find you are taking to this subject so well. Having found out
in this manner how much gold his silver was fully worth, the
merchant would next find out what percentage he would have
—
to pay for effecting the exchange it would be something very
—
small and then he would know what price he could get for his
silver.
that I may try to work out the proportion established between established
between
silver and gold in a silver standard country I think I can s ii ve r and :
do it. gold in a
silvsr
Mr. Bullion (smiling) : "Well • go ahead, then. standard
Will : 1 am sure / couldn't do it (So he amused himself by !
country,
drawing pigs with his eyes shut, whilst Alice knitted her brows
and tried in vain to follow John's example. After ten minutes'
hard work John looked up triumphantly.)
John Smith ; I believe I have it all right, sir ; I like working
out these jolly sums.
102 COIN OF THE REALM
John Smith : Just so. Then I divided the 3,775 by the 180
grains, and find that the proportion established between silver
and gold in India is 20*97 parts of silver to one of gold.
Mr. Bullion : Well done, John That was a sum requiring a !
Chapter IV.
Commercial Will; Now, then, ladies and gentlemen, take your seats; the
dealings boat is just about to start for H.M.S. " Salamander," and you
between
India and will be frizzling in Calcutta in another three weeks.
England. Mr. Bullion : Wait a bit, young man, you are too fast.
Please to recollect that I am a Manchester cotton manufacturer,
and until you have received a commission from me, you cannot
leave Manchester.
John Smith : Besides which, a man-of-war would not be the
kind of vessel in which you and your goods would be sent to
India, Will. I hope you will give me your commission, sir, for
I am much steadier than your junior clerk.
Alice : And what am I to do ? I will not be left out in the
cold!
Mr. Bullion : Dear, dear ! I do believe I shall have to let
all three of you go together ! Yes that ; will be my best plan,
and I will furnish each one of you with a separate commission.
Will : Shall we have to give the prices of everything in
grains of gold or silver?
Mr. Bullion : Most certainly, Will. Do not forget that the
reed price of everything that can be obtained for money, is a
WHAT IS IT P 103
working out any foreign commissions for me. " Metal points "
isa technical term meaning the limits within which exchanges
may vary, the boundaries of these limits being the cost of send-
ing metal from one country to another, coinage, and other
charges. I -willyou a passage from Mr. Norman's
just read to
pamphlet on his " Single Grain System," referring to exchanges
between England and India, and his remarks apply equally to
all other foreign exchanges. He says :
" The Daily News
quotation of the price of silver is not a sufficient guide alone to
the rate of exchange which you will find existing with India.
You must know whether India is requiring or parting with
silver. The knowledge of the par of exchange, and this know-
ledge combined, would enable you to make a good estimate of
the rate that should exist. To ascertain what the metal points
are, it is necessary to know the regulations of each mint in the
world —that is, the charge for coinage; the time occupied
between the presentation of the standard metal and its return
in the shape of coins by the mints ; the expenses connected with
packing and shipping the metal, and the extra length of time
requisite for the release of the coin from the mint to which it is
WHAT IS IT ? 105
doing your paper whilst John and I are having it out. Write
down 3,000 pieces of Manchester shirtings, at 7s.ll£d. per piece.
Will : Oh, father, please don't give me the same order as
Allie ; there will no fun at all in that
Mr. Bullion : You are too ready to cry out, Will. I am not
going to give you the same commission as Alice, but you are
both to be entrusted with the sale of the same quantity of
shirtings at Calcutta, after which it will be interesting to see
which of you will realise the largest profits on your different
me the money, as Alice will
tran sactions, for instead of sending
have to do, you, Will, are to invest the amount you make by
your shirtings in wheat, and then you will have to bring the
Indian wheat home to England and sell it for me.
Will (looking delighted) : Hooray ! that's something like a
commission. much,
I shall like doing that, father, very
Mr. Bullion: Well; put down £53 2s. at starting for the
freight, insurance, &c. of your Manchester shirtings, and then
go with Alice to my friends' house of business, and sell the
shirtings at five rupees per piece, less 3 per cent, for all Indian
charges. So far, you and Alice will be together, and you will
be her natural protector, I hope.
Alice (looking up from her paper and laughing) Father, :
dear, you look quite grave, and talk as if I was really going out
of the country, and likely to require a protector.
106 COIN OF THE EEALM :
from the sum you realise by the sale of the wheat, you will
have to deduct 2 per cent for London charges. There's your
commission, Will.
Will : And a mighty long one it is ! but I mean to tackle it.
Mind you give John a stiff lot of it, won't you, father ?
Mr. Bullion : If you don't take care, John will soon over-
take you, even with a paper much harder and longer than
either yours or Alice's. I warn you, John, that I am going to
quote all sums of money and prices of commodities in grains of
standard metal, which you must turn into pounds, shillings,
pence, and rupees, when doing your paper.
John Smith : That ought not to take me any longer than
turning the coins named into standard metal.
Mr. Bullion No I do not think it will hinder you. Your
.*
;
work for me will not begin until you have arrived in India *
WHAT IS IT P 107
Mr. Bullion : Well, once you are in India, the first thing I John's
commission.
wish you to do is to call on my Calcutta banker, and ask him
to make known to you some reliable Indian wheat merchant.
By the time you get to Calcutta my banker will have heard
from me, and will be ready to assist you in this manner, and also
to let you draw upon him for the amounts you will require for
my commissions. Having been directed to a wheat merchant,
you are to give him an order for 2,707*62 quarters of wheat,
for which he will charge you 2,600 grains of fine silver per
quarter this charge to include shipping and all other expenses.
;
I must say.
Mr. Bullion : You won't find it too much for your long head
when you come to do it, I hope. At all events we have reached
the last item. The remaining third part of the proceeds of your
wheat sale is to be invested in Manchester shirtings, at 46-8475
grains of fine gold per piece, the price to include freight and all
charges to India. When
you receive these pieces of Manchester
shirtings, be good enough to sell them for me at 825 grains of
fine silver per piece, and let me know what profit you make
upon the transaction after paying 3 per cent, for all Indian
charges. There, John, when you come to write out the
problems in order, I do not think they will frighten you much.
Now, put away work, all of you ; you may have a good, go at
them this evening before supper time, and recollect, I am willing
to give help if required.
Chapter V.
(John Smith and Alice and Will Bullion are waiting to hear
the result of theirwork last night. Their papers were placed
upon the study table before breakfast, and they are wandering
about the garden listening for the signal agreed upon. At last
Mr. Bullion opens the window and whistles, whereupon the
three young people scamper into the house and arrive breathless
in the study.)
Report on Mr. Bullion ; You have all done your papers so remarkably
commissions.
well that I have decided on giving you a set of questions to
work out, with the help of Mr. Norman's " Tables," before we
talk over these Indian commissions. Let them, therefore, form
part of your examination papers.
Will : So we haven't made any mistakes this time, father ?
—
Mr. Bullion : Hardly any, Will just a few slips of the pen.
Your work shows that you have, each one of you, grasped the
11
Single Grain System," I am glad to say.
WHAT IS IT ? 109
Freight, &c, to India, £53 2s.— £1,243 14s. 6d. in all. The
shirtings are sold at Calcutta for 5 Rs. per piece, a rupee being
reckoned worth 22'65d. You reduce £1,243 14s. 6d. to pence,
and divide by 22-65d. the answer is in rupees.
; Deduct 3 per
cent, for Indian charges, and there you are.
Mr. Bullion : Yes, there you are, no doubt ; but there isn't Single grain
one ordinary person in a hundred to whom the answer, given in system.
—
put it in my way Manchester shirtings, bought in England for a gi ance .
so many grains of fine gold, and sold at Calcutta for so many
grains of fine silver, for which you can command so many grains
of fine gold —
you see at a glance whether you have lost or gained
by the transaction, by comparing your two weights of fine gold,
which are the real prices of your commodities.
John Smith : I see that, now.
Mr. Bullion ; The same rule applies to all countries where
—
there is a standard currency America, China, Germany no —
matter with which of them you wish to effect a monetary
exchange, or to deal commercially. The "Single Grain System"
shows you at once the comparative weights of standard metal
to be paid or received. One more application of the " Single
Grain System " I wish to make clear to you before handing
you Mr. Norman's w Tables " and giving you your examination
questions.
John Smith : Is it about the quotations of foreign exchanges
in the daily papers, sir ? For I have been longing to under-
stand those quotations.
Mr. Bullion ; Then, I am glad to say that is the very matter Foreign
I wish to explain to you. Under the heading, "American exchanges
Markets," you will find in most daily newspapers three quotations,
dated from New York, namely: (1) Exchange on London
(sixty days' sight) ; (2) Exchange on Berlin ; (3) Exchange on
Paris (sixty days). Here is my morning paper. Let us take
110 COIN OF THE EEALM
was yesterday giving -95| dollars, that is, nearly ^th less than
one dollar, for four German marks. Now, Will, find out how
many grains of gold there are in 95 J dollars?
Will: I know how to do that: divide^ -95250 by the
denominational expression of a grain of gold in America, that
is,by 4-3066 cents.
Mr. Bullion: Make haste about it, then; and you, Alice
meanwhile find out how many grains of fine gold there are in
four German marks.*
(Alice was ready first, and was going to read out her figures ;
but Mr. Bullion held up a warning finger, and made her wait
until Will's sum was completed.)
Mr. Bullion : Will's sum must come first. What do you
bring it to, my boy 1
Will : There are 22-117 grains of fine gold in -95£ dollars,
father.
—
not, sir ?
Mr, Bullion : You are quite right, John.
Exchange on Alice (eagerly) And
: now, father, dear, do let me try to
shew you what I have learnt. Please lend me the paper, and
let me see what the " Exchange on Paris," is.
Mr. Bullion : Here it is, Alice ; let us hear what you can
make of it.
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(Concluded.)
—
questions. (1) Unit of value; (2) money of account; (3) unlimited legal
tender.
2. What is the difference between standard and token
coins % Explain this fully.
12. Work
out in grains of the standard metals the commis-
sions given by Mr. Bullion to his son and daughter and to John
—
WHAT IS IT ?
117
Smith, in chapters iv. and v., second series. Show the loss or
gain per cent, on each transaction.
13. Work out the same commissions as those referred to in
question 12, in the same manner, at the following prices
:
3,000 pieces sold over the ship's side, at Es.5 lias. lips,
per piece. A
rupee to he reckoned worth 16|d. English
money.
Purchase of Wheat in India.
7 84 J quarters of wheat, at Its. 19 la. 2ps. per quarter.
Freight to Great Britain, 4 s. per quarter.
784| quarters of wheat over the ship's side, at 31s. 6d. per
quarter.
14.Give the price of a British sovereign in ten silver-
standard countries and the price of a Mexican peso in ten
;
WHAT IS IT ? 121
£ s. d-
First sum, remitted to Calcutta in the form of gold 1,566 4
Second sum, remitted to Calcutta in the form of gold 1 ,538 4
Third sum, invested in Manchester shirtings, which
were sold at Calcutta 1,748 12
£4,853
E. C. SHABLAND.
124 COIN OF THE EEALM : WHAT IS IT ?
Marks Gained.
No. 1, Class II., J.D. (last term) 40 m id
No. 3, „ I-, „ 31 >>
but she has done by far the best set of answers. Walter
Ansell and Margaret Riddell have also done splendidly and ;
APPENDIX. 127
CONTENTS OF APPENDIX,
To the General Reader, pages 131 to 135.
—
Definition of Bi-metallism and Mono-metallism Ricardo on the exchange
—
value of gold and silver being governed by their cost value J. S. Mill on
—
the same -A simple common sense axiom to guide the mind clear of the Bi-
metallic theory —
Twelve reasons against the practicability of working
partially or universally the local —
dual standard theory The views of
Professor Stanley Jevons, and Bonamy Price upon the subject.
the gold pkice of silver and the rise in the silver price of gold.
2nd. The fall in the prices of Commodities generally in Great
Britain since 1873, prepared at the reciuest of Lord Herschell by
John Henry Norman for the Gold and Silver Commission of 1880-S
in November, 1887, pages 141 to 152.
128 APPENDIX.
APPENDIX. 129
An effective —
metal standard Internal and international interchanges through
—
the instrumentality of paper slips and leather strips only Professor Huxley
and a scientific automatic metal standard for monetary purposes Tentative —
definition of the terms and conditions of a sound automatic metal standard
currency —A standard of value must have correlative value with that for which
it exchanges— Standard metal, whether as coin or bullion, can never command
an agio either in token coin or paper so long as the monetary system of a
country is sound, and there are no coinage charges on the standard metal
Peoples in oountries where monetary systems were worked till 1873 on the
local dual standard theory, are now living in a fool's monetary paradise The —
financial secretary to the U.S.A., Mr. Fairchild, and other able men in these
—
countries, are fully alive to this The world-wide silver price of gold 44£
per cent, more than it was before the mints of Europe and the U.S.A. were
—
closed against the unlimited reception of silver from the public Money The —
opinions of Professors H. Sidgwick, Dr. A. Soetbeer, F. A. Walker, and C.
— —
F. Bastable on money Money and money tokens Reasons why the definition
—
of money Bhould be confined to the standard substance Monetary systems-
Exhaustive investigation should be made into the, I. elemental might of
—
weights of standard metals II., Fresh rules (if such can be found) for
the quantity theory of the standard —
ITI. Fresh rules in oonnection
with the value theory of the standard —
IV., Comparisons of the
monetary systems of the world —
The probable unprepared state
of the world to undertake the investigation, especially in the fourth particular.
— —
Information needed. Hindrances met with in seeking this information
9
130 APPENDIX.
—
during the past 13 years, from Government and others. Astounding opinion
—
that gold and silver are only small change. The second hlue book issued by the
Gold and Silver Commission a complete failure to elevate credit instruments to
—
the same platform as standard metals. Surprise at the appearance of Mr.
—
Dunning Macleod's views of wealth appearing in the report. The base of the
present dilemma rests upon the value theory. —
Impolicy of attempting to
remove silver from one of the two monetary standards of the world.
Table No. I.
Gross and fine weights in grammes and grains of the moneys of account,
and the chief gold and silver coins in current use in the world. The —
—
denominational expression for one grain of metal. The proportion of silver
to gold in the coinage. —
The value of moneys of account in the proportion
of 22*45 parts of silver to 1 of gold, in Great Britain, France, Germany,
and the United States.
APPENDIX. 131
first appeared :
,
132 APPENDIX.
political economists, merchants and bankers only, but for all who
are determined to understand the principles of the money they
daily use.
It is not to be expected that every fairly- educated child and
grown-up person who may peruse this pamphlet should, through
its means, at once become a master of currency and the exchanges.
contrary." Also "Queen Elizabeth in her edict telleth her people, that she
had conquered now that monster that had so long devoured them," meaning
the variation of the standard. Baron Cotton quoting this in 1626 added " and
so long as that staid adviser lived she never (though often by Projectors im-
portuned) could be drawn to any shift or change in the rate of her moneys."
* It is to be hoped we shall soon have heard the last of Sydney Smith's
opinion that the subjects of currency and the exchanges, next to love and
religion, fill our lunatic asylums.
t It will be seen in the appendix that three leading German political
economists, Professors Soetbeer, Lexis and Nasse, express their pleasure with
Mr. Norman's system as a great simplification of the whole exchange
calculus.
APPENDIX. 133
soldier and sailor, * it is not to be expected that there will be any altera -
* Certain benefit would oftentimes result to these classes from readily and
easily ascertaining the par value of all moneys of account and gold and silver
coins anywhere, whatever the gold price of silver or the silver price of gold
might be. In Dr. Patrick Kelly's "Universal Cambist," published in 1811,
it is stated that under regulation in Barbadoes a tenderer of light gold coins
134 APPENDIX.
was compelled to receive 2|d. per grain less for each grain short of the proper
weight of the coin. The denominational expression for one grain of standard
gold which contains fVth part of copper is 1*947 pence. Comparing this with
2*75 pence, the difference is 41 per cent, upon the lower quotation. If the
pence in Barbadoes were such as the pence now used here, i.e., the 1 240th part
of a pound, dealing in light gold coins was possibly a very profitable business
there in those days. The same author mentions the high opinion Sir John
Sinclair had of Kruse's Hambro Contorist, and that he recommended its
translation, Sir John adding: ''Till then we principally rely upon foreign
merchants, who make fortunes from our ignorance of the nature of the
exchanges." This book is in the British Museum, but there is no English
translation of it. Thomas Hatton in his essay on gold coins published
in 1774 mentions that the general value of gold is at the rate of twopence per
grain. The eminent numismatist Thomas Snelling in his most valuable essay
on gold coins in 1766 gives the denominational expressions for weights of
British standard gold, ranging from one quarter of a grain to one pound
troy. The denominational expression for one grain of fine gold in the British
Isles has been, and always will be, within a minute fraction of 2*124 pence,
so long as the sovereign is divided into 240 pence and there are 113-0016 grains
of fine gold in it on its issue from the mint.
,
APPENDIX. 135
* For an essay in reply to this question, besides Locke " On the Raising of
Coins," resort might be had to Messrs. Cernuschi, Gibbs & Grenfell's writings
on bi-metallism, and to F. A. Walker's " Money, and the History of the States
of North America on the excessive issues of inconvertible paper."
—— —
136 APPENDIX
AN ANTIDOTE TO BI-METALLISM ;
OR, LOCAL DUAL
STANDARDS; WRITTEN IN 1882.
1. Bi-metallism — —
What it is. The reception from and the
coinage for the public under national law by the mints of the
nation of any quantities of both gold and silver, and returning the
same to the public at a fixed proportion of one to the other, the
general approval being in the proportion of one part of pure gold
to fifteenand half parts of pure silver also the national appoint-
;
the rate of wages, nor on the rent paid, but on the total quantity
of labour necessary to obtain the metal and to bring it to market.
It has, therefore, been justly observed, that however honestly the
coin of a country may conform to its standard, money made of
gold and silver is still liable to fluctuations in value, not only to
accidental and temporary, but to permanent and natural, variations
in thesame manner as other commodities."
—
On Foreign Trade. "Any improvement in the facility of
working the mines by which the precious metals may be produced
with a less quantity of labour will sink the value of money
generally. The nations of the world must have been early con-
vinced that there was no standard of value in nature to which they
might unerringly refer, and therefore chose a medium which, on
the whole, appeared to them less variable than any other
commodity."
On Currency Banks. — " Gold and silver, like all other commodities,
are valuable only in proportion to the quantity of labour necessary
to produce them and bring them to market. Gold is about
fifteen times dearer than silver, not because there is a greater
demand for it, nor because the supply of silver is fifteen times
greater than that of gold, but solely because fifteen times the
quantity of labour is necessary to procure a given quantity
of it."
APPENDIX. 139
140 APPENDIX.
* This paper was read to the late Professor Stanley Jevons hefore it was
printed in 1882, and was approved by him. The following is an extract on it,
from a note received from the late Professor Bonamy Price in November,
1882. " Thanks, so many, for the paper you have sent me. It is excellent. I
wish it was hung up in the study of every bi-metallist in Europe : it
could not but do him endless good. The quotations are admirable."
APPENDIX. 141
* The average price of silver in London for the year 1873 was 59| pence
per ounce, and it is now 44 pence per ounce.
t The following are the per-centage total imports and exports of gold and
silver upon the total import and export trade of Great Britain in commodities,
on figures furnished hy the Board of Trade. Averages of periods of five years
ended in 1863, 14-4 1868, 9- 1873, 9-1 1878, 9-9 1884, 5-9. The average
; ; ; ;
yearly movements during these periods have ranged from £41,299,000 in the
period ended in 1884 to £63,323,000 in the period ended in 1878. During the
eight years ended in 1886 there has been an excess export over import of gold
of £11,318,000, against an excess import over export of gold of £75,249,000
during the previous 20 years. In the 28 years the excess import has been
£63,931,000. Taking the annual requirements of Great Britain for other than
currency purposes at £2,500,000, it would amount to £70,000,000 in the
28 years.
142 APPENDIX.
entirely supports the view which I have long taken of the standard
substance for currency purposes that I do not hesitate to make
this statement, thatwherever there is a monetary system which
is based upon an effective metal standard* there prices and rates of
exchange are denominational expressions of definite weights of
standard metals, and that these weights as weights alone con-
stitute prices and rates of exchange, and are ordinarily the true
measures of value and at all times the means of payment, All
instruments of credit, including legal tender banknotes, are money
tokens, and but signs of the standard substance which alone is true
money.
4. To might of weights of standard
illustrate the elemental
metals, working of exchanges of commodities through the
the
instrumentality of price, and by means of barter, I present a con-
crete case of exchange between England and India of Manchester
shirtings for wheat. I assume that prices for commodities have
fallen in Great Britain, and that they have remained stationary in
India, that the transport and all other charges are the same now
as they were in 1873, but that the exchange in 1873 on India
was 22-65 pence per rupee, and that it is now 16-75 pence per
rupee, f This fall in exchange is 26 per cent. Under the fall
* I mean by an effective metal standard that all money tokens are readily
convertible into the standard. I ventured to define the terms and conditions
of a sound automatic standard currency. It is briefly this The substance
:
t In 1873.
Grains of
Fine Gold.
£ s. d.
3,000 pieces of Manchester shirtings at
7s. H|d., or 44-8475 grains of fine gold,
per piece, with freight to India 1,190 12 6 or 134,542-5
Insurance on £1,200 4 10 „ 508-5
1,195 2 6 „ 135,051-0
Exchange at 22-65 pence per rupee, or 10-664 grains of fine gold per 165
grains of fine silver. 135,051 grains of fine gold divided by 10-664 grains of
fine gold gives 12,663-26, which is the number of rupees. These, multiplied
by 165, give 2,089,438 grains of fine silver.
:
APPENDIX. 143
2,089,438
The rate of exchange being 22-65 pence per rupee, or 10-664 grains of fine
gold, for 165 grains of fine silver. 2,089,438, being divided by 165, gives
12,663-26 rupees, and these, divided by 10-664, gives £1,195 2s. 6d.
Sale of Wheat Free of all Charges over the Ship's side in Great Britain.
Grains of
Fine Gold.
£ s. d.
784-627 quarters at £1 10s. 5|d., or
172-108 grains of fine gold per quarter 1,195 2 or 135,051
In this instance of exchange it is seen that 3,000 pieces of shirtings,
costing 135,051 grains of fine gold, sold in India for 2,089,438 grains of
fine silver, which, invested in wheat, &c, produced 784-627 quarters, which
Bold in the United Kingdom for 135,051 grains of fine gold. The rate of
exchange for converting the gold into silver and the silver into gold being
both the same, 22-65 pence per rupee, and one rupee for 22-65 pence.
In 1887.
Grains of
Fine Gold.
£884 3 10 „ 99,929-85
Exchange at 16*75 pence per rupee, or 7-886 grains of gold for 165 grains
;
144 APPENDIX.
APPENDIX. 145
* Though
the United States of America took into their currency £8,353,000
of year against an average during the preceding five years of
silver last
£5,621,000 the average price of silver was never lower than last year, and
;
so far vastly lower prices do not appear to diminish the production of the
article.
10
146 APPENDIX.
in Great Britain since 1873. Three among them which are on the
surface have been much examined ; and each has its advocates of
ability and experience in monetary matters. The three are 1st. :
* This narrow margin results from the vast mass of metals as currency to
be acted upon under the ordinary laws of supply and demand. The present
dislocation between gold and silver is the result of the break-down of unwise
legislation which assumed to control economic forces.
t If prices generally in Great Britain fall equally and at the same time
—
with the fall in the gold price of silver see Economist diagram of the prices
of silver and commodities generally in the first report of the present Gold and
Silver Commission — it is difficult to perceive how the current agricultural and
pastoral interests are worse off than before the dislocation, provided there has
been an equivalent fall in rent.
APPENDIX. 147
that metal becomes 30 pence per ounce. This means another fall
fixed relation period, and their theories are based upon their sur-
roundings. Their forefathers knew next to nothing about the
subject. We are witnessing the tremendousmight of gold and
silver under a less constrained legislative relationship than existed
14 years ago, and we may possibly have to abandon some monetary
theories and modify others.
The difference between the positions of gold standard countries
such as Great Britain and silver standard countries is enormous.
A gold standard country wherein barter has ceased to be practised,
the monetary system of the first order affecting each unit of the
whole population, wherein the quantity of the standard metal is
sought to be maintained at a tolerably uniform level such as Great
Britain possesses, cannot be compared with a silver standard
country wherein barter most extensively prevails, where the
monetary system, though of first class automatic order, affects
* It is stated in " Tooke on Prices " that before the middle of this century it
was estimated that India had absorbed £400,000,000 of silver, and that the
loss by abrasion, &c, on this equalled £4,000,000 per annum. At the same
time the French loss by abrasion on their silver circulation -was estimated at
£1,000,000 per annum. Baboo Tin Coorey Doss, of Calcutta, who in the main
has written very sensiblv upon the present currency dilemma, estimates the
silver circulation of India at £76,000,000. Official documents of the United
States of America place the circulation of that country at 1200,000,000, but
this is a calm doubling of the information received from their representative
in Calcutta,
APPENDIX. 149
between two periods 1873 and 1887, the outlay of value giving
factors necessary to produce a given weight or length of anything
possessing exchange value has diminished to the extent of 30 per
cent, in the fourteen years. It would appear to be exceedingly
difficult to estimate changes in a good many of the items which
* For centuries past there have been two currents of counteracting tendencies
in India 'which have been very largely intensified since the introduction of
railways into that country. One is the extension of the monetary system to vast
numbers of the people, the tendency of which should be to reduce prices there.
And the other the cheapened cost value of commodities, chiefly attributable to
diminished cost of carriage and the rendering accessible to trade fresh tracts of
country which would tend to raise prices there through the greater work the
same amount of standard metal could perform.
APPENDIX. 151
debtors from the additional burden which the break down of the
* " No two different substances can be exchanged for any length of time
on parallel lines of quantities or values, neither can they be produced for
any length of time on parallel lines of cost." The conclusion from this is
that local dual standards are unnatural, unscientific, and unworkable. It
has been pointed out more than once that if periods in history recurred just
now -with regard to the compaiative output of gold and silver and on the
present comparative cost of the two metals, within forty years there would not
be any gold currency, it would have been driven out by silver even though all
the world had embraced bi-metallism.
As an instance of lamentable ignorance, even among educated people in
official positions, where a better understanding might be expected, the defini-
tion given of double standards or bi-metallism in the last valuable report
issued by the Mint Master of the United States of America is " where its
standard silver coins are unlimited legal tender, the same as its gold coins."
This is the distributive side of bi-metallism. Without the receptive side as
well which is that the metal must be received in unlimited quantities, there is
no bi-metallism. As a fact it does not exist in the world at present.
It is hardly a fair representation of the monetary position of the world to
assert that silver is discredited because certain countries in Western Europe
and North America have ceased their efforts to combine that metal with gold
as their standards. Of the 1,030,000,000 people within the comity of trading
nations, whose interchanges as separate communities among themselves are
measured by a more or less effective metal standard, 700,000,000 people most
freely exchange any of their productions for silver.
2
152 APPENDIX.
The following are Mr. Norman's writings on monetary subjects since 1883.
The articles which subsequently appeared in " Local Dual Staudards,"
printed by Cassell's, have 1
attached. Those in this present pamphlet
have 2 attached.
July, 1887 on Professor Nicholson's " Money and monetary problems," July,
;
1888; "An effective metal standard," August, * 1888: "Money and monetary
systems," October, 2 1888 ; "Norman's Single Grain System," September," 2
1888. " A memorandum prepared for the Royal Gold and Silver Commission
of 1886-8, on the cause or causes of — (1) the world-wide fall in the gold price
of silver, and the rise in silver price of gold, and (2) the fall in the prices of
commodities generally in Great Britain since 1873," November, 2 1887.
APPENDIX. 153
154 APPENDIX
Alaska 90 1 62 1 41 61
Arizona . 228 697 180 780 191 925 195 1,070
California 3,018 287 2,606 513 2,670 615 2,905 300
Colorado . 912 3,280 862 3,246 871 3,280 843 3,574
Dakota 553 86 657 20 676 31 658 31
Georgia . 31 27 — 28 40
Idaho 369 738 370 709 256 569 288 432
Montana . 907 2,542 666 2,067 443 1,435 371 1,235
Nevada . 633 1,025 637 1,233 717 1,147 518 1,118
New Mexico . 82 471 164 616 61 615 57 580
North Carolina 35 1 31 1 32 1 34
Oregon 203 164 135 4 136 4
South Carolina 3
1
9 —2 12 12
Utah 44 1,332 37 1,386 27 1,394 28 1,158
Washington 30 16 25 14 18 17
Texas, Alabama,
Tennessee,
Virginia, Ver-
mont, Michi-
gan and Wyo-
ming . 1 42 18 1 18 2 7
This shows an increase in gold over 1885 of 9*4 per cent., and
—
156 APPENDIX.
dealt with, but may be due to the decreasing gold value of the
metal. Reasons are stated why reliable information of the quan-
tities of silver produced cannot be obtained, and why its value in
£ £ £ £ £ £
This report . 21,702 25,406 21,076 23,759 19,652 23,398
Last ,, 20,883 25,667 19,535 23,605 19,312 23,969
APPENDIX. 157
Cwt. £ Cwt.
98 ended 1580 11,926 82,750,420 283,965 127,030,000
100 „ 1680 16,591 115,110,000 761,634 340,961,500
100 1780 34,564 239,800,000 909,301 407,018,085
50 1830 15,521 107,672,000 717,671 321,243,290
50 1880 123,070 853,855,000 1,073,712 480,667,920
5 1885 14,948 103,706,076 257,500 115,257,000
£6,938. What the production of gold and silver had been from
the earliest times to A.D. 1481 is entirely conjectural. There must
have been a very considerable weight of gold and silver in one
form or another upon the surface of the earth in the service of
man, or hoarded, before 1481. For the 52 years ended in 1544 the
recorded annual average output of gold was 126/y cwts.,
£877,128; and of silver, 1,315 cwts. ; or at 15| parts of silver to
1 of gold, £590,636. The following is the recorded proportionate
weight of output of gold and silver during the periods mentioned :
Silver to Silver to
Years. Gold. Years. Gold.
1493 to 1544 = 52 10-41 = 1 1851 to 1870 = 20 5-42 = 1
1601 „ 1700 = 100 40-81 = 1 1871 „ 1880 = 10 12-24 = 1
mines in Montana stated, which was, " we can produce our silver
that our London Mint authorities have gone through them without
discovering any discrepancies to which they could draw my atten-
tion. It is true that the President of the Colorado Silver Alliance
considered that there was no truth in the statements I drew up in
connection with these figures, and therefore none in the conclusions
I arrived and he was kind enough to furnish me with informa-
at,
Silver.
Tons.
Production in 403 years 203,926 £1,792,177,795
Estimated currency circulation, and re-
serves of the whole world ... say £650,000,000
J
^ '
^ '
177 795
'
000 OMITTED.
£ £
1877 . 141,330 1882 . 199,050
1878 . 139,390 1883 . 224,940
1879 . 171,150 1884 . 228.860
1880 . 185,340 1885 . 246,460
1881 . 190,710
162 APPENDIX.
The estimate of the gold and silver money and bullion given
by the Doctor is as follows :
Netherlands......
Great Britain's Colonies without India 33,300
3,910
3,260
13,040
36,560
16,950
.....
France, Italy, Belgium and Switzerland
.......
Austria-Hungary
. 205,160
7,820
156,600
18,190
301,660
26,000
Germany
Scandinavia...... 85,280
5.620
37,660
43,620
2,050
13,700
128,908
7,670
57,360
United States of America. 123,430 63,280 186,710
Other Countries in Europe and America . 45,770 48,900 94,670
Increase Increase
Gold. or Silver. or
Decrease. Decrease.
There are more than 103 empires, kingdoms, states and islands,
which conduct their international interchanges of commodities, &c,
through the instrumentality of prices or definite weights of standard
metal. In only a few of these countries has barter ceased to exist.
If the world possessed but one satisfactory automatic metal standard,
whether gold or silver, the rate of exchange would be the expres-
sion of a weight of standard metal in country A for a weight of the
same standard metal in country B. If each country of the world
had a satisfactory automatic metal standard gold here, and silver
there, there would be six different expressions of the rates of
exchange. In the present miserable condition of the currencies of
the world, a quotation of exchange may mean one of 18 different
things. The following 18 quotations, which are given as illustra-
tions, should be the extreme or metal points, i.e., the limits to the
fluctuations of exchange. I am not, however, sufficiently acquainted
with the charges in each case to attempt this ; but in no instance
have I taken a greater margin of fluctuation than 4£ per cent.
The weight of fine metal in grains is for the rate quoted
G denotes gold ; S, silver ; IPC, inconvertible paper currency.
'
164 APPENDIX.
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APPENDIX. 160
asked the question, whither would the metal go, and nobody has
ventured to answer it." It was this very question that I essayed
to answer in the November, 1883, and May, 1886, numbers
of the Journal, and the reply was briefly this. I assume
that all the world has embraced local dual standards.
That the 40 years which ended in 1620, during which time
the output of silver, according to Dr. Soetbeer's tables, was
in the proportion of 53 parts of silver* to one part of gold, at once
recurs upon the present yield of gold, not an impossible event
being based on history. That the proportion fixed between the
gold and silver is the old relation, or one not in conformity with
the actual comparative cost of production, but much less silver to
gold than should be. Then the production of silver being un-
naturally stimulated, the mass of silver equal to £2,640,000,000
at 15^ parts of silver to 1 of gold would so saturate and inflate the
currencies of the world — all gold-yielding countries included —that
itmight cost 30, 60, 80, or 100 parts of silver to produce 1 part of
gold from the earth, whilst 1 part of gold could be taken from the
currency for 15^ parts of silver, and before the end of the forty
years there would be no gold currency. It would all have gone for
other than currency purposes.
1872. 1887.
Grains of Grains of Money of Account. Grains of Fine
Fine Gold. Fine Gold. Silver.
1872. 1877.
Grains of Fine
Grains of Grains of Money of Account.
Gold-
Fine Silver; Fine Silver.
Area of
miles.
Population •
)
Gold
Silver
530,000
338,000
£1,333,000
was asked whether the gold was intended for export, and if so, be
made to pay a premium for it ?
When we are asked to change our currency all these matters
have great weight and should be most carefully considered.
They require also to be generally known and kept prominently in
view.
170 APPENDIX.
Increase or
July 1886. Nov. 1887.
Decrease.
Gold Coin
Silver Coin
,, ,,
......
subsidiary
73,552
10,756
9,462
80,480
12,717
10,514
+
+
+
6,928
1,961
1,052
Increase or
July 1886. Nov. 1887. Decrease.
+
6,750
949
15,763
Silver ,, 623 968 + 345
Trade dollars 1,427 + 1,427
Increase or
July, 1886. Nov. 1S87.
Decrease.
Gold
Silver
Certificates
„ ..... 15,690
18,063
20,525
32,946
-f
+
4,935
14,883
* Accepting these figures of the gold and silver currency of the country,
one-third is silver and two-thirds gold. Should there be £60,000,000 less of
gold in the country than this statement shows, then the proportion of gold to
silver would be about half and half.
APPENDIX. 173
ever the time comes when the standard dollar goes to a discount,
the people, in the pockets of almost every one of whom will be
found more or less of these dollars, will emphatically demand that
they too shall be redeemed in gold, or made as good as when
issued, and that the purchase of silver bullion be stopped. If the
plan above suggested were now adopted, they would probably never
—
go to a discount surely not, except under altogether extraordinary
—
circumstances and yet the public would have a supply of them?
limited only by the need and demand of the people for them."
As Mr. Fairchild admits that the silver dollar is only worth 75
cents., he alludes, I suppose, to the time when the American
people generally will know as much about it as he does. He knows
that the coin must be a token, but appears to vainly crave after
making it a standard without a fixed relation to gold.
The question arises, when the National Debt of the United
States is paid off, £198,235,000,* which could be done in less than
ten years, assuming that the same policy with regard to it is
carried on, what can they take as security for their note issues ?
Can they face the present and prospective decline in the gold value
of silver ? I give them credit for knowing pretty well the com-
parative cost of the production of gold and silver, and the possible
output of the world, even at a greatly reduced cost of the pro-
duction of gold. Were silver to go down to 30 pence per
ounce, they would have to rate their silver atits true gold value if
would have upon the rest of the world ? In the first place, all
it
those who desire to exchange silver for gold, would have the
opportunity of doing so through the local dual standard mints,
gold would find its way into gold standard countries, and prices in
these countries might rise in consequence. The exchange between
gold standard countries and silver standard countries would return
to the approximate par it retained previous to 1872. The Govern-
ment of India, and the salaried classes there in connection with
Great Britain, and holders of Indian securities would rejoice, the
only drawback to all being higher prices in England, which must
accompany this change, as we have before seen.
But what will be the position if the Americans carry out their
threat to the nations of the Latin Union, that unless they will help
them keep up the fictitious value of silver, they will let it go ?
to
This, that silver must yet fall, and no one can say how much.
And the fall will have a very serious and trying effect upon silver
standard debtor countries to gold standard creditor countries. Take
India as an instance, say silver falls to 30d. per ounce, or another 5d.
per rupee, this would necessitate providing in India Rs.50,000,000
to secure the same amount of gold as before the fall, which is
APPENDIX. 175
issues by the State of stamped pieces of leather. Within certain limits inter-
changes of raw or manufactured articles, stocks, shares, bonds, &c, could be
as freely effected as though the instrumentality of gold and silver were em-
ployed. The larger quantity of stamped paper in A, constituting price, than
of stamped leather in B, would have no deterrent effect upon the interchanges.
The high prices for which the goods, &c, of B sold in A would have to be
given for the goods, &c, desired by B, and vice versa with regard to the goods,
&c, of A in country B. The impediment to commerce would arise when the
goods, &c, of one country are required by the other in excess of demand for
goods, &c, on the part of the country of whom the requirement is made, since
the paper in A would have no value in B, nor the leather of B in A. There
could be no such exchange relation between these countries as substances of
value embodied, say, in gold and silver at present affords.
12
178 APPENDIX.
value for which it exchanges for the former. The first is received
by the Mints in unlimited quantities, and is constituted unlimited
legal tender, whilst the second is neither the one nor the other.
Does a legal enactment that 15£ parts of silver shall be equal to 1
takes place, some would conclude, and with good reason, that the
standard would become the overrated metal, and of an autocratic
nature resembling inconvertible paper. If the definitions of a
standard which I have given are sound, and it is considered to be
of importance that the different peoples of the earth should possess
suitable sound automatic metal standards to the extent to which
they can use them, for their own benefit primarily, it might appear
that a great deal which some desire to attempt, especially with
reference to Indian currency (and a few advocate in journals
dealing with the subject), is a simple beating of the air, and both
imprudent and impracticable.
France and the United States of America, as peoples, are
reposing in a fool's monetary paradise, which springs from the
delusion that they possess local dual standards. The first insist
of fine silver shall be worth 1 grain of fine gold, whilst for other
than currency purposes the wide world over more than 22 grains of
fine silver have to be given for 1 grain of fine gold. Mr. Fairchild,
the financial secretary of the United States, and doubtless many other
men in both countries who understand the subject, are fully alive
to the great danger of the position. All the world now, when it
requires gold for currency or other purposes and has silver alone
to give in exchange for has to pay an agio or premium of 44|
it,
per cent, to command it. Such an agio as this in silver for gold
will, in all probability, come to be paid by the monetary institu-
tions of these two countries.
Money.
180 APPENDIX.
APPENDIX. 181
Monetary Systems.
* The impression left on my mind by the perusal of the second blue book
issued by the Gold and Silver Commission is, that it is a complete failure of
an attempt to elevate credit instruments to the same platform as standard sub-
stances. That Mr. Dunning Macleod's views of wealth should have been
brought forward at all, will surprise a good many readers of the report. It is
to be hoped that in the remaining work of the Commission, which is yet to
appear, expositions will be found of the "Elemental might" of weights of
standard substances the value theory of them
; and the different monetary
;
evident.
The inter-relation of these three classes of wealth are
infinite in their permutation, as they vary through the agency of
demand, and it is the function of money to indicate these relations
186 APPENDIX.
* "I think that your "Single Grain System" is most useful for all
practical purposes, and simplifies very much the -whole exchange calculus."
Professor Dr. W. Lexis, Gottingen, September, 17th, 1888."
— ;
APPENDIX. 187
gold or silver for the silver in any of the world's moneys of account
or coins gives the expressions for the weights thus multiplied. To
and the silver price of gold, ascertain
find the gold price of silver
the proportion established between the two metals by the market
price of silver in a gold standard country, or of gold in a silver
standard country, thus : say, the ounce of silver (444 grains of fine
result is -0946 of one penny, which is the gold price of one grain
of silver; divide 2*124 pence, the fixed expression for one grain
of fine gold in Great Britain, -0946 of one penny, and we get the
proportion at this price between gold and silver, viz., 22-45 parts
of silver to one part of gold. The fixed expression for one grain
of gold, being divided by this proportion, gives the gold price of
one grain of fine silver. The fixed expression for one grain of fine
silver, being multiplied by this proportion, gives the silver price
of one grain of fine gold. Attached to the names of the countries
in the following tables will be found (a) which denotes the posses-
* " Men in their bargains contract not for denominations or sounds, but
for the intrinsic value, which is the quantity of silver or gold by pubic
authority -warranted to be in pieces of such denominations." Locke, 1695. —
y
188 APPENDIX.
Constant*
Grains of fine
Value of
Gross Weight each Sil-
Sterling Gold (o) or
on issue from Silver(s)on One ver Coin
Value. issue Grain.
the Mint. at Atli of
from the Mint.
a Penny
Standard
Ounce.
-m
123-274
87225
G113-0016
880-72937
2-124d.
•149d. •0114d.
Crown, 5/- ; double florin, 4/- half-
;
threepence -/3
German Empire [a b c) Heligoland (b c) —
marks .......
20 marks or 2,000 pfennings, p., and 10
.... 16/6|
»/*J
i/i|
103-844283
...
154 3235
G93-45985
g53 00394
8145-8357
10-67c.
•'686c. •0205d.
copecks, c. .....
Russia (a e)—\ imperial or 5 roubles or 500
2-828r. -0249d.
| milreis or 600 reis, r., -£, fa, fa . 1/3 !
APPENDIX.
Constants
Value of
Grains of fine each Sil-
Gross Weight One
Sterling Gold (o) or ver Coin
on issue from Silver (s)on issue Grain.
Value. at Jjth of
the Mint.
from the Mint. a Penny ty
Standard
Ounce.
America.
United States (a b e e), Liberia {b e e) —
Eagle or 10 dollars or 1,000 cents., c,
20, 5, 2*. 1 41/1 258- G232-2 4-307C
Dollar or 100 c, *, *, &, is • 2/11* 412-5 S371-257414 •269c
Mexico {a d e) — Doublon or 16 pesos or
1,600 centavos, c. 10 64/8| 417-66575 G365-457531 4387c
Peso or 100 c, ^, is
*, \, . 2/ lift 417-66575 8377-068607 •265c
Brazil (a b c) — 10 Milreis or 10,000 reis, r
20, 5 22/5| 138-347931 G126-81996 78852r
2 Milreis or 2,000 reis, r., 1, *, * . 2/0* 393-524925 8360-731181 5-544r.
Peru (a b c e) —
10 sols or 1,000 centavos, c
20, 5, 2 1 39/7| 248908373 G224017535 4-464c
1 sol or 100 centavos, f , *, -j?g- 2/8* 385-20875 s347-227o75 •288c
Chili [a b c e) —
Condor or 10 pesos or
1,000 centavos, c. 5, 2, 1 37/5| 235-3882 G211-85066 4-72c.
Silver as Peru in pesos.
United States Columbia (d e), pesos,
Guatemali (de), pesos Venezuela {a be), ;
Asia.
Persia (a d e)—l toman or 200 shaheis, s. .
9/H 53-490327 G52-96536 3-776S.
1 keran or 2 panabats or 20 s. 73-785923 870-83448 •282s.
^
190 APPENDIX.
Constant!
Value ol
Grains of fine each Sil-
Sterling
Gross Weight Gold (g) or One
on issue from Silver (s)on issue ver Coin
Value. Grain.
the Mint. at ,'„ h oj
t
from the Mint. a Penny
Standan
Oance.
Asia —continued.
India (a d e), Burma («), Ceylon (e),
Africa.
Egypt (/> c) — 50 piastre or 2,000 paras, p.,
100, 25 10/2|f 66-096755 057-83466 69-163p.
10 piastres or 400 paras, 5, 2\ 1 .
1/*A 192-904375 8173-613937 4-608p. •0244d.
Tunis (*)— 50 piastres or 800 karohs, k.
24/- 150-619736 g135 557762 5-90K-.
2 piastres or 32 karohs, 1
Philippine Islands {e) Pesoduro or 100 —
m 95-587976 886-029178 •372k. •01214
for Asia 22 gold and 37 silver, for Africa 5 gold and 1 silver, for
America 79 gold and 116 silver, and for Australia 2 gold. Some
countries have the same weights of money of account and coins but
different denominations. If we confine the number of moneys of
account or coins on which the exchanges of the world are at present
regulated to 12 gold and 13 silver, 25 coins or moneys of account
APPENDIX. ¥ 191
in all, then the 2,089 coins of which Noback gives the weights in
grammes present 52,225 different values in the 103 countries of the
world, all of which can be ascertained by the possession of Noback's
book and my tables of values of one grain or gramme of fine gold
and one grain or gramme of fine silver in the various countries of
the world.
There is another German book, " Kruse Hambro Contorist,"
of which Dr. Patrick Kelly, in his Universal Cambist, written in
1811,makes mention, that Sir John Sinclair had a high opinion
of and recommended its translation into English. Sir John
it
adds " Till then we principally rely upon foreign merchants who
:
NORMAN'S
SINGLE GRAIN SYSTEM
FOR
Reprinted from the " Bankers' Magazine " for May, 1887.
LONDON:
—PRINTED BY WATERLOW AND SONS LIMITED, LONDON WALL, E.C.
1887.
NORMAN'S SINGLE GRAIN SYSTEM FOR DETERMINING THE PAR
VALUE OF ALL MONEYS OF ACCOUNT AND GOLD AND
SILVER COINS BETWEEN ALL COUNTRIES. ALSO FOR ASCER-
TAINING THE COMPARATIVE WEIGHTS OF FINE GOLD OR
SILVER INDICATED BY RELATIVE PRICES THROUGHOUT
THE WORLD.
By John Henry Norman.
Many of my friends, among whom are a good number who have to do with
foreign moneys of account and coins, are surprised when I tell them that I
have a table and rules whereby I profess that any boy or girl who can work
decimal multiplication and division is enabled to ascertain the par of exchange
between all the countries of the world, and the values of the coins of any
country in all other countries, whatever may be the gold value of silver or the
silver value of gold.
of the world, with the value of one grain of fine metal attached to each in the
currency of the country where the coin circulates. I pointed out that fine
metal alone was that to be taken account of in the exchanges. This table fell
perfectly fiat in Calcutta, where the whole banking and mercantile community
possessed it, and I am not aware that the issuers of credits in London , to whom
copies were sent, ever saw anything in it worthy of their attention. I received
a recognition of the merit of the compilation from the then Mint Master of the
United States of America, Dr. Linderman, in 1875, but no practical use (so far
as I have been able to ascertain) has been made of my method in the United
States. Observing, in 1882, that the late Professor Stanley Jevons was studying
the subject of legal weights of English coins, I sent him a copy, which led to my
making the acquaintance of this emiment authority upon certain branches of
currency. Since then I have fairly completed my system in tables, with
directions in my pamphlet on Local Dual Standards*, and my paper "An
Elucidation of the metallic bases of the Colonial and Foreign Exchanges and the
simplification of exchange," read before the Bankers' Institute on the 16th
February, 1887.
Having the value of one grain of fine gold in the currency of a gold standard
country, the weight of fine gold in any gold coin being multiplied by this value
the result will be the value of the coin in the currency of that country. The
same with regard to silver. To find the gold value of silver coins in a gold
standard country, the gold price of silver may be divided by the value of one
grain, which will give the number of grains of gold indicated by the price, and
thiscompared with the number of fine grains of silver procurable for the price,
will show the proportion established between gold and silver ; the fixed gold
value of one grain of gold being divided by this gives the gold value of one
grain of silver. The same process with regard to finding the silver value of gold
coins in silver standard countries, but the proportion established between gold
and silver must be multiplied by the fixed value of one grain of silver, and the
result will be the silver value of one grain of gold.
The exchanges are always based upon Mint issue weights between countries
possessing convertible paper currency. For actual weights scales are needed,
and then resort should be made to my large tables in Local Dual Standards,
wherein the gross weights, the alloy and the fine weights are given with the
values of one gramme and one grain in each of fifty-four countries of the world
of the 103 countries, the internal and international prices in which are based
upon gold and silver.
The following are the tables, and the rules are appended. I recommend
anyone who desires to master the system to work out the examples.
Norman's Single Grain System.
T3 " £ ..2S
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Norman's Single Grain System. 7
by 113-0016 gives 2-123863, which are pence, and constitute the value of
one grain of fine gold in the currency of the United Kingdom.
II. To find the silver value of a grain of fine silver in countries where
silver is the standard : divide the units of the money of account in the country
forwhich the investigation is made by the weight of fine silver in the money
account on issue from the Mint, and the result will be the answer.
Thus —
There are 192 pies in one rupee, and there are 165 grains of fine
:
silver in one rupee on its issue from the Mint. 192 divided by 165 gives
1*16363, which is one pie and parts thereof, and constitutes the value of
one grain of fine silver in the currency of India.
III. To find the gold value of one grain of fine silver in countries where
gold isthe standard the gold price of silver must be divided by the grains of
:
fine silver for which the quotation is made, and the result will be the answer.
Thus —
Say the gold value of silver in London is 44 pence per ounce, or
:
444 grains of fine silver 44 divided by 444 gives "099099, and this
;
decimal of one penny is the British gold value of one grain of fine
silver.
IV. To find the silver value of one grain of fine gold in countries where
silver is the standard the silver price of gold must be divided by the grains of
:
fine gold for which the quotation is made, and the result will be the answer.
Thus —
Say that the silver value of gold in India is Its. 21. 8a. Ip. per
:
tola, or 172§ grains of fine gold. Us. 21. 8a. \p., or 4,129 pies divided
by 172-5 gives 23-9362, and this number of pies constitutes the Indian
silver value of one grain of fine gold.
As the tables contain the values of one grain of fine metal in the standard
moneys of most countries of the world, it would be easy to find the gold value
of silver, and the silver value of gold, by forming a table of the relative
proportions of silver to gold established by a gradation of prices and applying
these proportions as divisors of the gold value of one grain of fine gold to get
the gold value of one grain of fine silver, and applying them as multipliers of
the silver value of one grain of fine silver to get the silver value of one grain of
fine gold.
Thus : —
Say the gold value of silver in London is 44 pence per ounce, or
444 grains of fine silver ; 44 divided by 2-123,863 pence, the fixed value
of one grain of fine gold gives 20-71 grains of fine gold, and this
divided into 444 establishes a proportion of 21-43 parts of silver to 1
of gold.
VI. To find the proportion established between silver and gold in a
silver standard country, divide the silver price of gold by the fixed value of
one grain of fine silver, and the result will be grains of fine silver ; compare
these with the grains of fine gold oommanded by the price, and the pro-
8 Norman's Single Grain System.
portion will be at once shown by dividing the grains of silver by the grains of
gold.
Thus :— Say the silver value of gold in India is Rs. 21. 8«. Ip. per tola,
or 172^ grains of fine gold Rs. 21. 8a. Ip., or 4,129 pies, divided by ;
1*16,363 pies, the fixed value of one grain of fine silver, gives 3,548*3
grains of fine silver, and this divided by 172| gives a proportion of
20*34 parts of silver to 1 part of gold.
Silver.
AS
oo Silver. Silver. oO Silver. So
London
Silver
of
444
or
fine
i- London
Gold
of
444
or
fine
P London
Silver
of
441
or fine
8°
&
S3
London
Silver
of
441
or fine
s°
Of*
S CM
d. d. d. d.
64 14*73 45| 20-61 43£ 21*80 40| 23-14
i 23-28
'
62 15*28 * 20*77 43 21*93 2"
Pars of Exchange.
It is notthrough an oversight that this paper does not treat of the limits to
the fluctuation of exchange, or metal points. To deal with this it would bo
requisite to know the conditions upon which each country can add to its
standard metal currency and the cost of effecting the same. I am acquainted
with these charges for a few countries only. They consist of coinage, packing,
carriage, shipping, freight, insurance of the metal, interest, and a small com-
mission if the business is undertaken by another. They will vary in total
amount from £ to 3^ per cent, on the par of exchange, above or below the par.
If I could present all these charges for each country in a percentage form on
the par of exchange, this knowledge, together with the pars of exchange, could
they be generally possessed, would not afford a sure guide to the rate of
exchange of the day. This rate depends upon the stato of the trade of the
countries between which the rate is quoted. If the state of the country
necessitates shipping standard metal, the rate will be one figure ; if it
necessitates the import of standard metal it will be another figure. None but
those who are intimately acquainted with the trade can state accurately what
the rate of exchange between two countries should be. It will, therefore, be
seen that bankers, bullion, exchange dealers and brokers should offer no
opposition to the spread of the knowledge of the pars of exchange, or to the
limits to the fluctuation of exchange, as their functions are not trenched upon
by the general possession of such knowledge.
A Traveller's Experience.
Travellers do not now take the coins of one country into another country ;
but, as a rule, they procure letters of credit under which a bill of exchange can
Norman's Single Grain System. 9
be drawn and negotiated, and thus the traveller becomes possessed of the monoy
of the country in which he is, according to his wants.
For my present purpose, as illustrations of my tables and rules, I assume that
— —
a traveller takes metal money gold and silver about with him.
A traveller from the United States of America has reached London with gold
and silver dollars, and desires to exchange some of them for English money.
He knows that both gold and silver dollars are unlimited legal tender in the
country which he has left he turns to my tables, and he finds that gold only
;
divides 47 by 444 and gets "105855 of a penny as the value of one grain of fine
silver. He finds by the table that there are 371*2514 grains of fine silver in
a dollar at Mint issue weight, and he multiplies that by •105855 and gets 39*288
pence as the par value of his silver dollar. Even if his dollar be of the Mint
issue weight, he should not expect to get quite this amount, as the risk, trouble,
and profit of the money changer must be considered. If the money changer
could see his way to buy the traveller's silver dollars at the proportion of 20*06
parts of silver for 1 of gold, and could freely dispose of them in America at the
proportion of 16 of silver to 1 of gold, he could make a profit of 25 37 per cent.,
less the expenses attending the carriage and disposal of them on the other side
of the Atlantic.
Our traveller proceeds to India, taking with him some gold and silver dollars,
sovereigns and shillings. On arriving at Bombay he is desirous of exchanging
some of his money for the metal currency of India. He consults the tables and
finds that silver is unlimited legal tender, and that the Mints are open to the
unlimited reception of silver from the public, in India. Against the silver rupee
in my table he finds the value of one grain of fine silver to be 1*16363 pie he;
multiplies 371*2514 grains of fine silver in the dollar, and 80*72937 grains of
fine silver in the shilling, and gets respectively 432 pies, or Rs.2. 4a., as the
—
value of one dollar, and 5 annas 10J pie as the value of the shilling these are
the par values in India of the dollar and shilling. He will learn that the Mint
charge for coinage is 2-^ per cent. he must therefore expect to get at least
;
2-rV P er c eQ k less
than the par value, even if the dollar and the shilling should
be of Mint issue weight. He desires to convert some of his gold dollars and
pounds into Indian money also. On reference to the gold table he finds that
gold is not unlimited legal tender, and that the mints are not open to the
unlimited reception of it. He will, therefore, have to sell his gold at the
market value, which he finds to be Rs.21. 8a. lp. per tola, or 172| grains of fine
gold. He must find the proportion established between gold and silver by this
quotation. To do this he divides 4,129 pies, which make Rs 21. 8a. lp. by
1*16363 pie, the fixed value of one grain of fine silver, and gets 3548*3 grains of
fine silver ; this divided by 172*5 grains of fine gold gives 20*34 parts of silver
to one part of gold. The Indian value of one grain of fine silver being
multiplied by 20*34 gives the silver value of one grain of fine gold as 23*668
pies ; 113*0016 grains of fine gold in the sovereign, and 23*22 grains of
fine gold in the dollar being multiplied by 23*668 pies respectively gives
10 Norman* s Single Grain System.
Its.13. 14a. lOp. as the par value of the sovereign, and Rs.2. 13a. 9p. as the par
value of the dollar, provided they are both of mint issue weight, and these are
about the prices he should get for these coins.
Our traveller next proceeds to Shanghae, in China, and desires to exchange
some of his gold and silver coins for the money of the country. He finds on
reference to my tables that silver is unlimited legal tender, but that there is no
mint in China. He learns, however, that it is the practice to stamp lumps of
silver with the weight and fineness by authority, and that these lumps, as well
as dollars, are unlimited legal tender. He desires to exchange some of his
silver coins for China money, and on turning to my silver table he finds that
the value of one grain of fine silver at Shanghae is 1*9665 cash; he, therefore,
multiplies the 371*2514 grains of fine silver in the dollar, the 80*7297 grains of
fine silver in the shilling, and the 165 grains of fine silver in the rupee, by
1*9665 respectively, and gets 730*065 cash for a dollar, 158*764 cash for a
shilling, and 324*47 cash for a rupee. These are the par values provided the
coins are of mint issue weight, and are about the values the coins would sell
for in Shanghae. He desires to exchange some of his gold coins, and finds
that he must sell them at their market value. The price of gold for the day
is 22 taels 639 cash for 566 grains troy. The proportion established between
gold and silver by this quotation is ascertained by dividing 22 taels 639 cash by
1*9665, the value of one grain of fine silver this gives 11512*4 grains of silver,
;
which divided by the weight of gold, 566 grains, gives a proportion of 20*34
parts of silver to 1 of gold. 1*9665 multiplied by 20*34 gives 40, which is the
silver value in cash for one grain of fine gold. 113*0016 grains, 23*22 grains
and 11 grains being multiplied by 40 cash, gives respectively 4 taels 520 cash
as the value of a sovereign, 928 cash as the value of a dollar, 440 cash as the
value of a rupee. These are the par values provided the coins are of mint issue
weight, and should be about the China money obtained for them.
Our traveller now returns to the United States of America, and lands at San
Francisco. He finds that he can there pass his United States silver dollars
upon an equality with United States gold dollars, the legal tender proportion
in the States being 16 parts of silver to 1 part of gold, though in England he
had to sell them at the proportion of 20*06 parts of silver to 1 of gold. He
desires to exchange his sovereigns and gold rupees into dollars. Finding by my
gold table that the value of one grain of fine gold in America is 4*3066 cents,
he multiplies 113*0016 grains of fine gold and 11 grains of fine gold by 4*3066
respectively, and gets $4*866^ as the value of the sovereign and 47*37 cents as
the value of the gold rupee. The coinage charge is one-fifth of 1 per cent. so ,
that these gold coins should command about the values we have worked out,
provided they are of mint issue weight. To convert his silver, consisting of
some lumps from Shanghae stamped with the quantity of fine silver in them, his
silver rupees and shillings, he must ascertain the rate the mints will buy silver
at. This is the London price of the day, the Bland Bill providing that not
more than $4,000,000 and not less than §2,000,000 should thus be purchased by
the mints per month. I presume the market rate is judiciously adjusted to the
Mint purchasing rate. We will say that the market rate is in the proportion
of 20*06 parts of silver to 1 part of gold, the value of one grain of gold being
4*3066 cents in the States, 20*06 divided into 4*3066 gives -214685 of a cent as
the gold value of one grain of fine silver. Say the weight of the Shanghae
lump is 20 ounces of fine silver, the rupee of 165 grains of fine silver, and the
shilling of 80*72937 grains of fine silver, being multiplied respectively by
214685, give $20*61 for the Shanghae lump, 35*42 cents for the rupee, and
17*33 cents for the shilling, provided the coins are of mint issue weight. These
rates are about the prices which would be obtained if the proportion of silver
to gold is 20*06 of the former to 1 of the latter.
I have taken you through two gold and two silver standard countries. You
can now, if you please, go through all the other countries of the world,
exchanging the gold and silver moneys of all countries in each, as you proceed,
with the assistance of my tables.
Two German books, one by Noback, of 1 ,234 pages, published in 1879, contains
the gross and fine weights in grammes of 637 gold and 1,462 silver coins,
Norman* s Single Grain System. 11
together 2,089 coins of the world ; the other of 114 pages, published in a choap
form in Bremerhaven in 1875, contains the fac-similos of 426 gold and 824
silver coins, together 1,250 coins, of which there are for Europe 316 gold and
663 silver, for Asia 22 gold and 37 silver, for Africa 5 gold and 1 silver, for
America 79 gold and 116 silver, and for Australia 2 gold.
I can imagine that not a few readers of this article may say, " What is the
use of all this botheration with decimals, long calculations and minutias of
grains of fine metal ? If I am going into a country or going to do business
with a country I learn about its coinage in a short way, I do not want to be
troubled with all this stuff.'' I reply that I have an end in view. I know
the mode by which my own mind has found its way through the difficulties out
of which no books that I know helped me, and I expect that my present
experience may possibly be helpful to other students. If you would have
reasonable opinions upon mono-metallism, bi-metallism, tri-metallism, alter-
native metallism, or no metallism, you must understand the foundations of
metallism. If you cannot master, or care not to master, the system which I
advocate, and which appears to be the very essence of metal currency, would
it not be only prudently cautious to express ignorance of the subject ? But if
you can master them, is it not your duty to do so ? seeing that every member of
a civilised community is interested in the question of sound currency, and that
all who can exercise any influence in the State may be called upon to express
an opinion upon the matter.
—
I can name 103 countries in the world— and there are more the prices in
which are based upon gold and silver. Some of these countries have the same
weights of money of account and coins but different denominations. If we
confine the number of moneys of account or coins on which the exchanges of
the world aro at present regulated to 12 gold and 13 silver, 25 coins or moneys
of account in all, then the 2,089 coins of which Noback gives the weights in
grammes present 52,225 different values in the 103 countries of the world, all
of which can be ascertained by the possession of Noback' s book and my tables
of values of one grain or gramme of fine gold and one grain or gramme of fine
silver in the various countries of the world.
Standard Currency.
It is, inmy opinion, absolutely necessary that an automatic standard currency
for a country should be embodied in a substance having a correlative value to
that for which it exchanges. This substance must have a cost value and a sale
value, and be subject to the laws of supply and demand, just as other substances
are which are produced under similar circumstances. * The errors and miseries
resulting from the frequent over-issue of inconvertible paper money are due to
the disregard of this truth. Acurrency standard cannot at the same time be
both physical and metaphysical, real and ideal. It is due to the effort which
has been made to combine these two that false opinions of currency are formed
and the mind is led away into maze and mystery. Let it become firmly
established that the basis of a sound automatic currency must be laid of a
substance of correlative value with other substances, and through imperfection
subject to variation in value in consequence of being produced and distributed
under the laws of supply and demand that all other instruments used in
;
standard by legal enactment based upon human needs ; that these enactments
provide for the unlimited reception of the substance and the fitting of it for
currency by the State, and the appointment of that currency as unlimited legal
tender and we could never hear of such wild proposals as are current in the
;
* I have treated of these subjects in the columns of the London Chamber of Commerce
Journal under the heads of "Function of Gold and Silver Currency in the Internal and
—
International Transactions of Countries International Indebtedness and Simplification of
Exchange," July, August, September, October, November, December, 1883, March, May,
1884 ; " Production of Gold and Silver in the United States of America," January, March',
1885; " The Comparative Cost of the Production of Gold and Silver and the Comparative
Yield of Grains of Gold and Silver per Ton of Ore," June, July, August, September
December, 1886, February, May, July, 1886, May, 1887.
12 Norman* 8 Single Grain System.
United States of America, one of which is that the soundest and safest standard
currency is notes composed of greenbacks.
Single Grain System, for finding the Weight of Fine Metal indicated
by Relative Prices, and Mastering the Exchanges.
Relative prices and values in different civilised countries which are not under
the slavery of inconvertible paper currencies, are the comparative weights of
fine gold for fine gold, fine silver for fine silver, fine gold for fine silver, or fine
silver for fine gold. Rates of exchange would also come under the same
definition. My single grain system provides divisors for each country which
resolve the weights of fine metal indicated by values, prices, and rates of
exchange. Also multipliers, which yield in each country the values of the
weights of metals in the moneys of account and the gold and silver coins in the
world.
If I am credited with any knowledge of the principles of currency, or
mastery of the exchanges, I am happy to explain that it is altogether due to
possessing a firm hold on a few common sense axioms with regard to the first
and the use of the single grain system applied to the second. I would assure
every one that he can easily possess all the information which 1 have acquired.
He may take different views of the principles of currency. But if he desires
to be at home on the foundation of the exchanges and the international values
of the world's moneys of account and gold and silver coins, he will find my
system, which is contained in the tables and rules given herewith, all that is
requisite to enable him to accomplish it. I am astonished that this single
grain system has not been discovered and generally acted upon ages ago, for it
has a simplicity, beauty and power which I feel confident will cause it to
become of great general benefit to the world.
I trust that as each reader understands and appreciates this system he will
do his utmost to extend the circulation of it, and assist others to understand it.
A good test of the knowledge of it consists in determining the monies of
account meant by the three quotations of exchange under the head of American
markets in the daily newspapers, and the weights of fine metal in the six
quantities indicated by the three quotations.
I would that some millions of the more thoughtful of the inhabitants of the
world could possess this table and rules at once.
All youths should work this system, and their elders of both sexes should
understand it.
GOLD PAR
Mb. Alexander L. Gj ^encross's Table of Denoi MNATIONAL EXPRESSIONS FOR EqUTV
of the Wobld ; on Noback's Weights, given by Mb
The following t ixample shows the use of ihe table Q. How many francs 1 :
— ai
Argentine Republic. In the left hand column fin i franc. Then at the point where tl
be found the requirec equivalent, viz. 5.
Florin. Milreis.
w
I
o
(
f
1
n
E
o
13
E S ii
It
gg
d
1 I
-a
m
o
6
1
o
m
8
t 1
«3
OQ
13
o
M
1
ov ^ 0-0395 0-04E 0-099 0-0327 0-164 0-103 0-0551 0-222 0-112C 0-2066
Franc 25-22 1-24 2-500 2-086 4-133 2-600 1-3889 5-5997 2-8306 5-1826
20-43 0-81 2-03 1-6898 3-35 2-106 1-125 4-5357 2-2926 4-1978
Florin, A. H 10 09 0-40 0-494 0-8344 1-653 1-04 0-5556 2-2399 1 -1322 2-074
19-85 0-479 0-592 1-198 1-98 1-246 0-6658 2-6843 1 -3569 2-4815
6-103 242 0-299 0-605 0-5047 0-629 0-3361 1-3551 0.6849 1-264
9-70 0-385 0-475 0-962 0-8023 1-59 0-5341 2-1538 1-0887 1-993
18-16 0-72 0-888 1-800 1 -5021 2-975 1-872 4-0317 2-038 3-7319
4-504 0-179 0-225 0-447 0-3725 0-738 0-4643 0-2181 0-5055 0-9256
„ B 8-91 0-3533 0-436 0-883 0-7369 1-46 0*919 0-4905 1-9712 1-831
Dollar, TJ. S A 4-867 0-1929 0-238 0-4824 0-4025 0-7999 0-5017 0-268 1-080 0-5461
4-95 0-1962 0-242 0-491 0-4092 0-8106 0-51 0-2724 1-0984 0-5552 1-0165
s< „ A. R 5-044 0-2 0-247 0-600 0-4217 0-8266 0-52 0-2778 1-12 0-5661 1 -0366
5-334 0-212 0-262 0-628 0-4412 0-874 0-55 0-2937 1-1317 0-5986 1-0961
4-69 0-186 0-23 0-465 0-3878 0-7683 0-4834 0-2582 1-0411 0-5262 0-9636 •
5-044 0.2 0-247 0-500 0-4172 827 0*62 0-2777 112 0-5661 1-0366 :
5-215 0-207 0-255 0-617 0-4313 0-855 0*538 0'2s71 1-1578 0-6853 1-076 '
,, Ecua 6-125 0-203 0-251 0-608 0-4239 0-839 0-5283 0-2822 1-1377 0-5752 1-0539 : 3
4-8 0-19O3 0-235 0-476 0-397 0-7861 0-4949 0-2641 1-0658 0-5388 0-9861 < 3
„ P.I 4-948 0-1962 0-242 0-491 0-4092 0-817 0-5109 0-2726 1-0986 -5553 1-0168 : 3
Yen 4*89 0-194 0-239 0-481 0-4037 0-800 0-603 0-2688 1 -0838 0*5478 1-003 <
Toman 2-124 0-O843 0-104 0-210 0-1757 0-3481 0/219 0-117 0-4717 0-2394 0-4366 <3
10-273 0-4O73 0-503 1-018 0-85 1-6S3 1-06 0-6657 2-2808 1163 2-1109 :i
41-68 1-650 2-04 4-132 3-4471 6-829 4-26 2-29 9 2539 4-6408 8-6616 II
i> Egypt 97-69 S-87 4-782 9-683 8-0986 16-00 10-071 5-38 21689 10-964 20-074 K :
110-71 1-392 5*423 10-98 B-1571 18 15 11-42 6-1003 21-595 12-4375 22-763 K!
N.B. 700,000,000 peop] e of t tie ea rthef) ect th eir inl ernati anal i nterch anges CD Hlv
HI.
7 kind permission of Mr. Alexander L. Glencroas and the Secretary of the Chamber 1
i , F.E.G.S., F.S.S.)
JIYALENTS.
Weights of Fine Gold on Issue of the Coins from the Mints in 47 Countries
Henry Norman, in this Journal for July 5th, 1886.
al to, at par, one dollar, Argentine Republic? A. In the top column find dollar
ical and horizontal columns, respectively, of these two denominations intersect will
Dollar. Piastre.
.a .-
gtf ft T3
ft PI
H OS
3« P4
M
0-1982 0-1875 0-2133 0-1982 0-1917 0-1951 0-2083 -2029 0-2048 0-4707 0-0974 0-024 0-01025 -0090
5-0000 4-7284 5-3785 5-0000 4-8363 4-9214 5-2540 5-0971 5-1667 11 -8720 2-4552 o-eosi 0-2682 0-2277
4-05 3 '9603 4-3566 4-05 3 -9174 3-9863 4-2557 4-1287 4-1860 9 6161 1 '9887 0-4901 -2091 0-1844
1-999 1 -8918 2-1514 2-00 1 -9315 1 -9686 2-1016 2-0383 2 -0667 4-7488 0-93210-2425 -1033 0-0910
2-392 2-2667 2-578! 2-3969 2-3185 2 -3592 2-6187 2-4435 2 -4768 5-6912 1 -1874 O-290O -1248 0-1091
121 1-1442 1-3015 1 -2099 1 -1703 1 -1909 1-2714 1-2335 1*2503 2-8728 0-5911 0-1464 0T624 -0651
1-923 1-8601 1 -8928 2-0207 1 -9605 1 -9871 4-6661 -9443 0-232 0-0977 0-0676
1-9229 1-8186 2-0686 1-,
3-6000 3-4045 3-8725 3-600 3-4822 3 -5434 3-7827 3 -6700 3-720 8 -6477 1 -7677 0-4357 0-1859 1) -1639
0-8928 0-8414 0-9605 -8929 0-8637 -8788 -9382 0-9143 0-922 2-1201 0-4000 0-1081 0461 0-0407
1 -7663 1-6704 1 -9001 1-7856 1 -7086 1 -7386 1-8561 1-8007 1-8253 4-1942 0-8671 )-2138 0-0913 0-0804
0-9615 0-9124 1 -0378 0-9648 0-9332 -9496 1-0137 0-9835 -9269 2-2908 0-4737 0-1167 0-0198 0439
-9807 0-9275 1-055 0-9308 -9487 0-9653 1 -0305 1-0134 2-3287 0-4816 0-1187 0-05C6 0-0446
0-9458 1-0578 1-00006 0-9673 0-9343 1-0508 1 -0195 1-033) 2 -3745 0-4911 0-1210 0-0516 0-0456
1-0574 1-1375 1-0223 1 -0408 1-1111 1-0780 1 -0927 2-5107 0-619! 0-1279 0646 0-0481
1 '0574
-9295 0-8971 0-9296 -8992 0-9510 -9768 0-9477 0-9606 2 -2073 0-4564 0-1125 0-04S0 0-0423
0-9999 0-9457 1 -0767 -9673 0-9S43 1 -0508 1-0194 1-0333 2-3744 0-4809 0-1210 -0616 0-0455
1-0338 0-9777 1-1121 10338 1-0130 1-0864 1 -0503 1-0683 2-4548 0-6077 0-1251 0-0534 0-0471
1-016 0-9603 1 0929 1 -0114 0-9600 1-0676 1-0357 1-0496 2-4123 -4989 0-1229 0-0525 -0463
0-9516 0-9 1 -0203 0-9517 0-9205 0-9367 0-9701 0-9834 2-2979 0-4673 0-1152 0-0491 -0433
-9S09 -9277 1 -0562 0-9809 0-9488 0-9655 1-0308 1-0136 2-3291 "4817 0-11S9 0-0107 0-0447
0-9677 0-9152 1-041 0-9677 0-9361 0-9525 1 -0165 0-9865 2*2978 -4762 0-1171 0-0499 0-0447
0-4211 0-3983 0-4528 0-4209 0-4074 0-4145 0-4135 0-4293 0-4352 -2063 0-0509 -0217 • -0192
2-04 1-926 2-1907 2-0385 1 -9700 2 -0045 2-1400 2 -07 60 2 -1044 4-8356 -2465 0-1062 0-0927
8 -2623 7-14 8-88S3 8 -2623 7 -992S 8'1329 8-6325 8-4231 8 -5383 19-619 4-0573 0-4266 0-3762
19-366 18-315 20-8332 19 -367 18 7331 19-0625 20-394 19-7431 20-069 45*9933 9-61C0 2-3439 0-8819
21 -9598 20-7685 23-6237 21-9611 21-2424 21 -6158 23-076) 22 -388 22 -6932 52-144 10-7835 2-6578 1131
ices. .Among these people gold forms no part of the monetary circulation.
INDEX. 193
INDEX TO CONTENTS.
FAGR
Adit level
Alice Bullion at the ironmonger's ........
Alice Bullion's definition of "Value and Price"
46
88
94
,, ,, commission 103
Alloy 18
Alluvial soil 37
Amalgamation, Gold 50
Amount
,, Silver
of alloy allowed
Ancient coins stamped with seals
......... .
53
68
14
Answers to examination questions . .117
Areometer, Baume's 67
Arrival at New York
Assayer, Duties of
Assay Office and its surroundings
... 62
64
63
,,
Intrinsic value of.
,, ,, .......
standard.
token
24
25
24
..........
,, ,, ,,
„ Light 64
,, On
the value of 8
„ Perfect 79
,,
,,
Portability of
Stamping the .......... 18
78
,, Weighing the
Commercial dealings between India and England ..... 78
102
Comparative weights of standard metal seen at a glance
Conditions of standard metal moDey
Consol, Mr
. ...
. . .109
86
75
Cookery, Some more 55
Copper 16
,, mines 44
Corn 13
Cornish mining rules .29
Cost value 9o
Countries in which gold and silver are found 42
Cradle rocking 49
Crown pieces, James II. 's pewter 17
Cupellation ............
Crushing, stamping, and grinding mills 47
66
Cupels
Currency
............
Cupellation of gold samples
system of exchange
. 4G
14
.
.
.
. . .10
INDEX. J 95
Page
Dore gold , 59
Drawback, that the value of metal is fluctuating 21
Dressing floors 47
Education of a miner,
Eliquation
Emigrants' landing station,
............ On the
New York
26
68
68
Kxamination questions .. . ... .116
..........
. . . .
..........
,, ,,
„ Paris 112
...........
,,
Exchange or barter 9
,, value 96
Explanation of technical terms . . . . . . . .21
Fee, Origin of 11
Fifth Avenue Hotel and its surroundings
Fillets brought to right thickness
Finding of metals . .
........ . . .
.
. .
. .
.
.
.
.
. .36
.62
76
Flux 69
Foreign exchanges . . . .109
..........
. . . . . . .
Geology 25
Gold and tin unaffected by water or air 41
.........
.
,, dust 14
made up into ingots 51
..........
,,
..........
,, .
...........
,,
.............
,,
The
...... . . .73
49
72
Intrinsic value
74
81
20
Invented about 900 B.C., Coins .14
196 INDEX.
Page
Inventor of Hydrogen- Amalgam process 72
n >> weighing machine 79
Ironmongery, List of 90
Iron money 16
ii
,,
,,
commission
gives the exchange value of British coins . ... 107
8
Land rising 34
,, subsiding 34
Lead money . 15
Leather money . 12
Legal tender 22
Limestone 33
Loss of gold 73
Maohinery, &c 26
Machines at work, Hydrogen- Amalgam 74
Manchester, Visit to
Marking machines
Melting department, The
........... .75
87
77
Metamorphic rocks 35
Metal easily divided and sub-divided 21
Metal points , 103
Metals hidden in earthy or mineral ore 40
Metals in use now .18
Mineralogy and chemistry 25
Miners' tricks 43
Mining companies 28
,, contracts . . . . . . . . . . .30
,, John Smith's ideas of 28
„ officers . .30
Mint, A visit to the 76
Mono-metallists and bi-metallists 23
Monetary system does not affect principles of barter . . . .96
Money of account 83
Nickel 17
Norman's single grain system 83
Norman's single grain standard of measure 87
..........
Ordinary methods of working foreign exchanges
Origin of metal money
109
13
Ornaments
Oxidise, To
............
Origin of mountains 33
12
54
Refining 58
Refractory ores cause mercury to sicken. . . . . .72
Rent of ground 29
Report of examination .124
,, on commissions 108
Representative money . 23
Ring money . 15
Rough lumps 14
Route from California to New York . 60
,, ,, Land's End to Panama 27
,, „ Panama to California 45
Smelting ............
Small cost of treatment by this process
....
Soil in which the precious metals are found .
74
53
28
Specific gravity of liquids . . . . . . . . .37
,, ,, solids *. .39
Standard money 22
............
. . - . .
Tailor, The 88
Tin 16
198 IXDEX.
Page
Tin mines 44
,, money 16
, ,never found native 44
,, used in coinage 71
Tizzy, Mr 615
Tizzy's invitation, Mr 62
Tobacco 13
Token money
Treatment of gold granulations
,, powdered ores
........ 23
68
48
,, silver granulations 69
Tribute work 29
Tut work
Twenty-third street, New York ........ 29
67
Unit of value 82
TJnstratified and stratified rocks . .32
Use of reservoirs 48
,, single grain system 93
........
of account . . . .94
8
,, money, On the
........
Various uses of gold and silver
Vegetable productions, Other .
9
64
13
Veins and lodes 36
Verdigris at the mining district, Mr . 4o
,, Good-bye to Mr
Volcanic eruptions ........
.
• 71
35
THE EXCHANGES
BY
LONDON:
WATERLOW & SONS LIMITED, PRINTERS, LONDON WALL.
188 9.
THE EXCHANGES
UrON A SCIENTIFIC BASIS, &C
TABLE I.
•Additional confus-i n in this instance arises from the statement that the par of exchange
with In lia was 2* per rupee. This was not so For 2*. per rupee is the equivalent of
64-58 pence per s andard ounce ot silrer.and between this present time and lf-33 ihe highest
yearly average rice was 62 ^ pence in 1859.
I
Under this term 'It., the one-tenth of a
pound, or 11 •30000 graius of fine gold has beon lost sight of.
There is no system in these. If yon start with the idea
that between the British Isles and silver standard countries
the quotations will be pence for the moneys of account of these
countries, you find the conditions with Russia and Austria-
Hungary, both professedly silver standard countries, throw
you out, with Russia penoe per rouble, with Austria- Hungary
florins per £1. Again Chili, with a professedly silver standard,
and the Argentine Republic, with a professedly gold standard,
both are quoted pence per their moneys of account. A
scientific system of quotations of exchanges would be the
following for the sixteen quotations of the eight countries
named as examples for the whole.
TABLE II.
—Grains
fg of Fine Gold. fs— Grains of Fine Silver.
• The testimony of traders with India in this country confirms this. Tt is a'so a direct
necenary remit upon the first principles of competition. I onsidir this collateral evidence.
The (jold price of Indian Govern n fnt rupee seem it 68 lias fallen 30 ]>er cent, in the British
Isles since 1873. There has b- en no such fall in India, nor has there been a rise in their
silver price in the least correspond Og with the rise in the silver price of gold. The cause
of the decline in price in the br.tish Isles is not the damaged credit of the Indian Govern-
ment, the qnaxri ty of this class of securities, nor tie diminished supply of goid but he
fall in the gold price of silver. The same motive actuates both the'denlers in In inn
commodities, such as cotton and wheat, anil in Indian Government seem .ties- namely,
profit measured in gra ns of jrold or grains of silver. Surely the same cause equaliy affect*
the gold (trices of both classes of property.
ing the standard in another country, resulting from the
transmission of the metal. The metals may be gold for gold,
silver for silver, gold for silver, or silver for gold. II. The
weight of fine metal which has to be given in one country for
a bill upon another country, which bill is a legal obligation to
pay a definite weight of fine metal in that country. III. The
weight of fine metal which could be obtained in one country by
the sale of a bill upon another country, which bill is a legal
obligation to pay a definite weight of fine metal in that
country. The limitation to the fluctuation of exchange in the
three cases would be the cost of carriage and coinage of the
metal. Assume the following, a domestic case : —A person in
London has funds in India which he desires to possess in
London. There are three methods open to him whereby he
—
could accomplish this I. Order the rupees home and sell them
in London. II. Have his silver invested in a bill on London
for gold. III. Sell his bill in London for gold for his rupees
in India. The best of the methods would depend upon whether
India is indebted to the British Isles, or the British Isles are
indebted to India, considered in connection with the proba-
bilities of the future. The transmission of silver keeps the
operation open u^itil the sale of it, but this method is
independent of the risk of a bill of exchange being dishonoured.
This mode, however, owing to the uncertainty of the gold price
of silver in the British Isles and the trouble connected with
the business, would not be thought of unless the ordinary
dealers in bills of exchange declined to buy bills in London
upon India or to sell bills in India upon London. If India is
receiving metal — —
her normal condition the best mode would
be by sale of a bill here for the silver in India. If India is
sending silver to London, there would be little difference
between selling a bill in London on India or buying a bill in
India upon London.
The normal state of the exchange between the British Isles
and India necessitating the remittance of silver to the latter
country, a closer investigation into the reasons for the rate for
a bill of exchange in London on India being for so much, may
be interesting and instructive. Take the market price of silver
in London at the proportion of 22| parts of silver to 1 of
gold, or 41*88 pence per standard ounce. The par of exchange
between London and India at this price would be 15*56 pence
per rupee. The par being 15*56 pence, why should a seller of
a bill for rupees in London get a higher price than this ?
Because the bank or dealer in bills who is desirous to remit
money to India would have to pay 2|- per cent for coinage
of his silver in India and -f of 1 per cent, for charges on the
transmission of it, in all 3 per oent. more if he was compelled
to resort to the shipment of silver. A
bill which gives him
rupees in India causes him less trouble and suits him as well
in other respects. So the seller of a bill obtains Is. 4'locl. for
a rupee. But if the state of India's indebtedness to the
British Isles necessitates the shipment of silver, then upon the
the same gold price of silver the person desiring the equivalent
of his rupees in London would obtain no more than Is. 3'44rf.
because | of 1 per cent., being charges on the transmission of
the silver home, must be deducted.
The same laws would operate in connection with the
exchanges of standard metal or metals between all countries of
the world as those described in the exohange between the
British Isles and India, and the object of the latter part of this
paper is to bring them in a simple manner before your
readers.
The world has no science of money. Not a day should be
lost in preparing a science primer of money. I would that I
could assist to stimulate the scientific men whose vision is not
distorted by credit instruments, who possess an aptitude for the
subject and could easily acquire " a masterly skill in bullion
and coin," in my own country, in the United States of
America, in Germany and in France, to accomplish this.
"Within ten years of the subject being taught with geography
in the schools of the world and the issue of this primer, the
utmost astonishment would be expressed at the present all
but universal darkness which is over the subject and the gross
errors which flourish therein.
-e=£~^=9-
H J\vX\